The largest telecom company in Nigeria, MTN, reported a net negative position of -N392.6 billion after taxes for the months of January through March, or a 462.2 percent fall.
The company’s first quarter 2024 financial statement shows that the net loss for the quarter caused its cumulative losses and negative shareholders’ funds to expand further to N599.2 billion and N434.7 billion, respectively.
From N568.1 billion in the first quarter of last year to N752.98 billion this year, MTN’s revenue jumped by 32.5%. N349 billion in revenue from data services and N318.9 billion from voice services drove the achievement.
The company had a drop in key performance indicators despite the spike in revenue, which resulted in negative shareholders’ equity and retained earnings of N599.2 billion and N434.7 billion, respectively.
The Nigerian Autonomous Foreign Exchange Market saw a decline in the value of the naira in the first quarter, from N907 to N1,627 per dollar. This resulted in losses for Nigerian businesses and had an effect on inflation, which increased to 33.2% in March.
The Monetary Policy Rate was increased by the Central Bank of Nigeria to 24.75 percent, which affected the cost of finance for Nigerian companies.
53 percent of MTN’s obligations are floating and have been influenced by interest rate hikes, whereas 47 percent of its debts have fixed interest rates.
The company’s net financing loss increased from N4.5 billion in the first quarter of last year to N656.4 billion, a 14,489.2 percent increase as a result of the naira depreciation.
Due in large part to the depreciation of the naira, the company’s net finance costs increased about 17-fold to N749.8 billion from N43.7 billion in the first quarter of 2023.
Karl Toriola, the CEO of MTN Nigeria, clarified that the company’s solid operating performance was obscured by significant macroeconomic challenges.
“The first quarter’s operating environment remained very challenging, with rising inflation and continued depreciation of the naira off an already low base,” he stated.