Nigeria MTN Nigeria Hits N887.6 Billion FX Loss in First Half of 2024 Amid Economic Strain

MTN Nigeria reported a staggering N887.6 billion foreign exchange loss for H1 2024, up 95.2% from the previous year. Despite a 32.6% revenue increase, the naira's devaluation and high inflation severely impacted profitability, leading to a significant loss after tax and pressure on operational costs.

MTN Nigeria Plc has disclosed a staggering foreign exchange (FX) net loss of N887.6 billion for the first half of 2024, marking a dramatic increase of 95.2% from the N454.6 billion loss recorded in the same period last year. The financial report, released on July 31, 2024, outlines the company’s performance amid challenging economic conditions in Nigeria.

The breakdown of the FX losses reveals that N367.9 billion stemmed from realized losses, while unrealized losses accounted for N519.7 billion. Karl Toriola, CEO of MTN Nigeria, highlighted that the company faced significant pressures from high inflation rates and the devaluation of the naira, which contributed to declining earnings. He stated that without the adverse impact of foreign exchange on operational costs, the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin would have been considerably higher at 50.9%.

The company reported a revenue increase of 32.6%, totaling N1.53 trillion between January and June 2024, driven by growth in voice and data services, which generated N632.3 billion and N727.3 billion, respectively. However, the depreciation of the naira—closing at N1,505 per US dollar in June—further exacerbated the FX losses, leading to a loss after tax of N519.1 billion.

Toriola noted that the macroeconomic environment has been difficult, with inflation reaching 34.2% in June and an average of 32.8% for the first half of the year. Despite these challenges, MTN remains committed to implementing strategies to mitigate the impact of currency fluctuations while driving growth in its operations.