MTN Nigeria Plc reported their first loss before taxes of N177.8 billion, as opposed to a pre-tax profit of N518.8 billion the year prior. The loss resulted in the total loss of investors’ money.
The Times reported that, the corporation blamed the losses on a significant foreign exchange loss that increased from N81 billion in 2022 to N740 billion.
This represents the company’s first loss since going public in Nigeria.
Additional updates MTN Nigeria said that the Directors would not recommend a final dividend payment, given the resulting loss for the year ending December 31, 2023 as a result of the significant currency depreciation and its effects on retained profits.
Company Commentary: “The year 2023 was marked by a highly demanding operational environment, including growing inflation, currency depreciation and shortages of foreign money. These factors were further aggravated by geopolitical unrest and cash shortages in the first quarter of the year due to a redesign of the naira.
Throughout the year, these elements presented significant challenges for both our clients and our company. With an average rate of 24.5%, the inflation rate rose throughout the year, peaking at 28.9% in December 2023, the highest number in 18 years.
The withdrawal of the fuel subsidy in May 2023 resulted in higher gasoline costs, which made the situation worse. The average price of petrol and diesel increased by 257.1% and 66.4% to N1,416.8 and N600/liter, respectively, in 2023. The “willing buyer, willing seller” paradigm was reinstated and a more flexible foreign exchange management system was established by the Central Bank of Nigeria in June 2023.
The Nigerian Autonomous Foreign Exchange Market rate moved from N461.1/US$ in December 2022 to N907.1/US$ in December 2023, a 96.7% negative shift in the exchange rate vs the US dollar as a consequence.
This event greatly raised the expenses associated with doing business in Nigeria, particularly for MTN Nigeria, and contributed to the increasing pressure on such costs in relation to our tower leases”
