MTN Nigeria Net Loss Spikes by 507% to N519bn
MTN Nigeria Plc has posted a strong spike in pretax loss for the first half of 2024, its financial statement submitted to the Nigerian Exchange revealed. Net loss for the first half of 2024 grew by more than 507% year on year to N519 billion.
This was due to about N888 billion FX losses seen in the period as negative naira fluctuations damaged the company’s shareholders fund.
The telecommunication company revenue grew by 32.8% year on year to N1.54 trillion from N1.16 trillion in the first half of 2023, according to its earnings scorecard.
In the period, service revenue was major driver of the rise in total revenue. Data revenue surged by 54.7%, reaching N727.33 billion in H1 2024, up from N470.02 billion in 2023. This happened as MTN Nigeria’s user base increase with higher data usage fueled by improved service quality.
Data users climbed by 11.1% year on year, bringing the total number of data users to 45.6 million at the close of H1 2024.
MTN Nigeria’s 4G network now covers 82.0% of the population, up from 81.5% in December 2023, while 5G coverage has expanded to 12.7%, up from 11.3% in December 2023.
Voice revenue increased by 12.4% year on year, rising to N632.38 billion in H1 2024 from N562.69 billion due to higher user activity and an expanding subscriber base.
Its report revealed that the subscriber base grew by 2.9%, with the addition of 2.3 million subscribers, bringing the total to 79.4 million in H1 2024.
Supporting the topline, fintech revenue rose by 11.0% year on year to N48.41 billion, while digital revenue saw a significant increase of 98.9%, reaching N30.44 billion at the end of the period.
The downside to the company’s earnings performance in the period is fast rising costs profile spooked by the decision to devalue the naira in 2023.
Since the devaluation, MTN Nigeria Plc has seen significant pressures that has damaged its balance sheet strongly.
Specifically, its direct network operating costs grew faster by 111.9% year on year to N586.80 billion, up from N276.96 billion in H1 2023.
MTN Nigeria’s operating expenses also rose significantly, increasing by 51.4% year on year to N404.63 billion from N267.33 billion in the comparable period in 2023.
The strong increase in the group operating expenses attributed to elevated inflation, high energy costs, and the persistent naira fluctuation.
At the end of the period, the telecom company’s operating profit declined by 27.7% to N304.55 billion from N421.04 billion in H1 2023.
It financials also showed that net finance costs surged by 95.96% year on year to N168.16 billion in the first half of the year, up from N85.81 billion in H1 2023.
Analysts said the increase reflects a 79.1% rise in finance costs and a decline of 8.9% in finance income in the period.
Its lower finance income figure was due to lower interest earnings on investments, while the rise in finance costs stemmed from higher interest expenses on borrowings and leases.
MTN Nigeria experienced a substantial increase in FX losses, driven by sustained negative naira fluctuation. According to its financial statement, the telecom company’s FX losses grew to N887.68 billion in H1 2024 compared to N454.67 billion in H1 2023.
Analysts at CSL Stockbrokers said in a note that these FX losses contributed to a 529% increase in the pre-tax loss, which reached N751.29 billion in H1 2024 from N119.43 billion.
Despite reporting a tax credit of N232.23 billion, MTN Nigeria still recorded a net loss of N519.06 billion in H1 2024, significantly higher than the N85.5 billion Loss reported in H1 2023. NAICOM Opens New Licensing Portal for Insurance Coys, Others
