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<a href="https://www.mtn.ng/" target="_blank" rel="noreferrer noopener">MTN Nigeria Communications</a> has reported a big loss in its financial results for the first nine months of 2024. According to the company, the business has experienced huge pressure owing to the country’s macroeconomic, regulatory, and currency fluctuations.&nbsp;&nbsp; 
The company reported a 28% decline in its capital expenditure and accumulated an after-tax profit of N118.5 billion within the period. Factoring in forex losses, MTN Nigeria further made an after-tax loss of N514 billion. On a year-on-year basis, the company suffered a 59.2% reduction in the after-tax profit.&nbsp;&nbsp; 
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 <img loading="lazy" decoding="async" width="800" height="478" src="https://technext24.com/wp-content/uploads/2023/03/MTN-Nigeria.jpeg" alt="MTN Nigeria proposes a merger of MoMo PSB, Yello Digital Finance Services to form one 'super' finance platform" class="wp-image-185417">
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The company highlighted that based on the restrictive rules placed on SIM registration, total subscribers decreased by 0.9% to 77 million. Also, the number of MoMo wallet subscribers reduced by 21.8% to 2.8 million.&nbsp; 
On retained earnings and shareholders’ funds, MTN Nigeria figures stayed negative at -N723 billion and -N573.6 billion respectively. Meanwhile, it recorded a 21.9% increase in its positive free cash flow to N536.8 billion.&nbsp;&nbsp;&nbsp; 
Moreover, the company’s <a target="_blank" href="https://www.investopedia.com/terms/e/ebitda-margin.asp" rel="noreferrer noopener">EBITDA margin</a> (earnings before interest, taxes, depreciation, and amortization) slumped by 14.9% points to 36.3%. 
<h4 id="inflationary-impact-on-mtn-nigeria" class="wp-block-heading">Inflationary Impact on MTN Nigeria</h4> 
With prices rising by averaging 32.8% in the first nine months of 2024, up from 24.5% in the same period last year, inflation has remained a huge challenge to Nigerian businesses.&nbsp;&nbsp; 
In a bid to improve economic conditions, the <a target="_blank" href="http://www.cbn.gov.ng" rel="noreferrer noopener">Central Bank of Nigeria</a> (CBN) has jacked up interest rates significantly. This has seen the monetary policy rate jump by 8.5% points to 27.25%, as of September.&nbsp; 
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According to MTN Nigeria, the increase in interest rate has resulted in higher funding costs for the company. However, “it helped reduce volatility and improve liquidity in the foreign exchange market,” the company said. 
<h4 id="first-6-months-of-2024-mtn-nigerias-losses-and-debts" class="wp-block-heading">First 6 Months of 2024: MTN Nigeria’s Losses and Debts</h4> 
With a corporate social investment of N2.6bn, MTN <a target="_blank" href="https://www.nationalaccordnewspaper.com/half-year-mtn-posts-n519-bn-loss-after-tax/" rel="noreferrer noopener">reported</a> a N519.1bn loss during the first half of 2024. This results from foreign exchange losses relating to the high inflation rate and the naira’s devaluation.&nbsp; 
At the same time, the company reported that it is being owed N250 million by Nigerian banks from its Unstructured Supplementary Service Data (USSD) rendered to bank customers. Consequently, the mobile network operator is seeking regulatory approval to halt its USSD services for banking transactions unless the impasse is resolved.&nbsp; 
<h4 id="a-resilient-performance-amidst-inflation-mtn-nigeria-ceos-reaction" class="wp-block-heading">A Resilient Performance Amidst Inflation: MTN Nigeria CEO’s Reaction</h4> 
Reacting to the financial report, MTN Nigeria Chief Executive Officer, Karl Toriola painted the results as a “resilient performance despite persistent macroeconomic pressures and regulatory challenges”. 
“In the first nine months of 2024, we sustained the growth in our underlying operating performance, underpinned by our resilient business model and operational agility, despite challenging conditions,” he said. 
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 <img loading="lazy" decoding="async" width="720" height="405" src="https://technext24.com/wp-content/uploads/2024/10/images-7-1.jpeg" alt="Karl Toriola, Chief Executive Officer of MTN" class="wp-image-237983">
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Toriola further stressed the company’s strength after it recorded a 33.6% increase in service revenue.&nbsp; 
“Our commercial momentum drove broad-based growth across all revenue segments, demonstrating the underlying strength and resilience of the business. We recorded an increase in service revenue of 33.6%, which was ahead of the average inflation rate in the period. This growth was led by data and supported by voice, fintech, and digital services.” 
<a target="_blank" href="https://technext24.com/2024/10/14/mtn-ads-launches-in-sa-and-nigeria/" rel="noreferrer noopener">Also Read: MTN Ads Launches in SA and Nigeria</a> 
<h4 id="way-forward" class="wp-block-heading">Way Forward</h4> 
While noting the impact of inflation on the company’s business operation, Toriola pointed out that the company remains focused on driving the needed growth.&nbsp; 
“The higher inflation and interest rates weighed on consumers’ spending power and impacted business activity. However, we remain focused on enhancing operational efficiency and driving the growth of our commercial operations,” Toriola said. 
The MTN Nigeria CEO also added that considering the economic state of Nigeria, the company was not surprised by its financial result for the first nine months of 2024. He explained that the company was expecting the macroeconomic pressures, including high inflation and foreign exchange volatility to persist and impact consumer and business spending.&nbsp; 
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 <img loading="lazy" decoding="async" width="960" height="640" src="https://technext24.com/wp-content/uploads/2023/01/MTN-Logo-Reuters.jpeg" alt="MTN to challenge Ghana's $7MTN to challenge Ghana's $773 million tax bill" class="wp-image-174767">
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“We remain focused on implementing our strategic initiatives to mitigate the impact on our operations,” he said.&nbsp; 
As part of the strategies for intervention, MTN Nigeria has decided to prioritize the recovery of its subscriber base which was impacted by SIM card registration rules. It also promised to engage with regulatory authorities to make tariff adjustments for the “sustainability of the industry and its value chain”. 
“We are pleased with the continued structural demand for data, which underpins our exciting growth outlook, provided the industry can achieve a more sustainable tariff framework. To support this traffic growth, we anticipate an increase in our capex deployment, particularly given the substantial progress in reducing the foreign exchange exposure from our trade line obligations. 
“Against this backdrop, we remain optimistic of a constructive outcome from industry tariff engagements, which we believe will support the recovery of our profitability and balance sheet profile, as well as the medium and long-term growth of our business,” Toriola said.&nbsp; 
<h4 id="economic-depression-the-push-for-tariff-hike" class="wp-block-heading">Economic Depression: The Push for Tariff Hike&nbsp;</h4> 
Recall that MTN, alongside other mobile network operators, is seeking approval for a 10% tariff increase. The telecom companies believe that this will help them meet up with the current economic realities. 
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According to them, this will cover operational costs and the effect of the rising foreign exchange regime and inflation. They also argue that without the adjustment, their financial viability and service standards will continue to deteriorate. 
MTN Nigeria’s CEO, Karl Toriola added that telecommunications operators face rising costs including increasing the rate of diesel prices used in powering base transceiver stations. “There should be no delusion; if the tariff doesn’t go up, we will shut down.” 
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 <img loading="lazy" decoding="async" width="800" height="400" src="https://technext24.com/wp-content/uploads/2023/01/Untitled-design-12.png" alt="MTN, Airtel, others record N53.6bn from SMS, as Nigerians sent 14.08bn messages in 2022" class="wp-image-174739" style="width: 100%;height:auto">
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However, the Nigerian government has declined the proposal. It urged the companies to implore strategic measures to counter inflationary pressures. 
Following their first-quarter results, MTN and Airtel have adopted a cautious capital expenditure model for 2024. However, the two other mobile operators in the country, 9mobile and Globacom, are not publicly listed. 
<a target="_blank" href="https://technext24.com/2024/10/22/mtn-ceo-raises-alarm-say-might-shut-down/" rel="noreferrer noopener">Read More: “If tariff doesn’t go up, we will shut down”- MTN CEO raises alarm</a>.
The post <a href="https://technext24.com/2024/10/31/mtn-nigeria-suffers-n514bn-forex-loss-in-9-months/">MTN Nigeria suffers N514bn Forex loss in 9 months</a> first appeared on <a href="https://technext24.com">Technext</a>.

MTN Nigeria suffers N514bn Forex loss in 9 months

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