MTN Nigeria has announced that it will hold an extraordinary general meeting with its shareholders on how to manage the capital loss it suffered in 2023.
The Extraordinary General Meeting is set to take place in Lagos later this month, as indicated by a company notice lodged at the Nigerian Exchange Limited on Tuesday.
The notice of the Extraordinary General Meeting revealed that there would be just one specific activity: “To consider and discuss possible measures for addressing the loss of capital by the company for the year ended December 2023.”
In the report filed with the NGX, MTN noted that service revenue grew by 22 per cent to N2.5tn but recorded an N137bn loss after tax, driven by an N740bn foreign exchange loss.
The retained earnings and the shareholders’ fund of MTN Nigeria were reduced to negative amounts of N208 billion and 40.8 billion, respectively, due to the net loss for the year.
The Chief Executive Officer of MTN Nigeria Karl Toriola, declared, “2023 witnessed a very challenging operating environment characterised by rising inflation, currency devaluation, and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira. These factors created severe headwinds for our customers and our business during the year.
“The significant devaluation of the naira in 2023 resulted in a materially higher net forex loss of N740.4bn (2022 restated: N81.8bn), reflected within net finance costs, which resulted in a reported loss after tax of N137.0bn compared to a restated PAT of N348.7bn in 2022. This has resulted in negative retained earnings and shareholders’ equity at the end of December 2023 of N208.0bn and N40.8bn, respectively.”
In addition, moving forward, Toriola said, “We anticipate a challenging 2024 as we tackle the complexity and ongoing effects of high inflation and elevated forex volatility on our operations. Given the material uncertainty these present in the near term, we have suspended our medium-term guidance for EBITDA margins. We maintain the medium-term guidance for service revenue.
“In light of the negative retained earnings at the end of 2023, the board of directors has resolved not to declare a final dividend for 2023. Looking forward, we remain focused on sustaining our commercial momentum and accelerating our service revenue growth, improving the profitability of the business, and strengthening the balance sheet.”
