MTN Nigeria posts N137bn loss in 2023 as naira devaluation exacts heavy toll

Spread the love

MTN Nigeria reported an after-tax loss of N137 billion in 2023 compared to profit after tax of N348.7 billion in 2022 on the back of huge foreign exchange impairments that continues to impact operations.


The company took a hit due naira devaluation only of N658.6bn in 2023 as against N81.8bn  a year earlier according to its full-year audited financial results for 2023 filed with the Nigerian Exchange Limited (NGX) on Thursday.

According to the telco giant, its operating cost increased by 341.9 percent to N951.5 billion due to increased borrowings, higher interest rates, and a significant devaluation of the naira from N461 per dollar in December 2022 to N907.1 in December 2023.


“This was a result of the liberalisation of the forex market in June 2023. Consequently, forex loss was N740 billion (FY 2022: N81.8 billion), while finance costs were up by 60.9% to N236.9 billion. The underlying net finance cost, excluding the forex loss, increased by 58.1% to N211.1 billion,” the report reads.

Elaborating on the impact of the unification of the FX market, MTN said the movement of the official rate to a 96.7 percent increase at the end of December 2023, significantly impacted its operating expenses and net finance costs.

“MTN Nigeria’s operations are exposed to foreign currency volatility on its operating and capital expenditure. The most significant of these exposures relates to the tower lease costs, which comprised the bulk of the 45-50% foreign currency exposure in our operating expenses in 2023,” the report said.

“The majority of the lease costs are indexed to the US dollar but are invoiced and paid in naira.”

Besides the FX loss, the company said the effective tax rate decreased by 9.8 percentage points (pp) to 23.0 percent.

This, the firm said, was driven mainly by the reported loss before tax and the derecognition of deferred tax assets from Y’ello Digital Financial Services (YDFS).

The telco said it recorded a total loss after tax of N137 billion.

MTN however said its revenue increased by 22.69 percent to N2.469 trillion compared to N2.012 trillion in the previous year.

On operating profit for 2023, the firm recorded N773.6 billion compared to the N734.164 billion profit made in 2023 — up by 5.38 percent.

The report also showed that earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 12.3 percent to N1.2 trillion, while EBITDA margin decreased by 4.5 pp to 48.7 percent.

Other key highlights of the reports include an increase in the firm’s total subscribers by 5.3 percent to 79.7 million in 2023; a 12.7 percent (44.6 million) rise in active data users; while active mobile money (MoMo PSB) wallets also surged by 163.2 percent to 5.3 million.


Meanwhile, on debt metrics, the company reported an after-tax loss (PAT) of N137 billion in 2023 compared to a PAT of N348.7 billion in 2022.

On the other hand, profit-before-tax stood at N177.8 billion compared to N518.8 billion in 2022, the report said.

This, according to MTN, was linked to negative retained earnings and shareholders’ equity at the end of December 2023 of N208 billion and N40.8 billion, respectively.

“The devaluation of the naira has had a material impact on our financial position, resulting in the reported loss and depleted reserves,” the firm said.

“We expect 2024 to be a challenging year due to the rising inflation and devaluation of the naira.

“In January 2024, the inflation rate reached 29.9%, while the exchange rate has further devalued to N1582/$ as at 26 February 2024.

“This is anticipated to put additional pressure on consumers, the cost of doing business and further potential forex losses.”

MTN, therefore, restated its commitment to strong business executions and growth, adding that its balance sheet remains strong with sufficient headroom to withstand macro volatility, supported by a value-based capital allocation strategy.