₦519 billion H1 loss: MTN Nigeria’s bottom line takes an FX-induced battering

MTN Nigeria records massive loss after tax in H1 2024, driven by FX volatility.

Accelerating inflation and currency volatility, which defied all the policies implemented in the first half of 2024, created a tough macroeconomic environment for some of Nigeria’s biggest businesses.

MTN Nigeria, the country’s largest telecommunications firm and historically a guaranteed profit maker, reported a loss after tax of ₦519 billion for the first half of 2024. It’s a massive jump from the ₦85 billion it lost in H1 2023. 

Most of those losses are linked to the company’s USD obligations, such as leases priced in dollars and financing costs. The devaluation of the naira and currency volatility in H1 have significantly increased those costs. 

“Overall, these headwinds put pressure on consumers and the cost of doing business in the country,” wrote CEO Karl Toriola in the results shared on Wednesday. “This includes, for MTN Nigeria, additional forex losses, leading to pressure on our period-end negative capital position.”

To mitigate these FX exposures, MTN has reduced its outstanding letters of credit in dollars to $100 million by June 2024. It is also renegotiating lease agreements with IHS towers. 

The telecom giant is seeking regulatory approval for tariff increases to offset some of those losses.

Key takeaways

• MTN has 79.4 million mobile subscribers in H1 2024
• Active mobile money (MoMo PSB) wallets increased by 73.9% to 5.5 million
• FinTech revenue grew by 11%

While revenue grew to ₦1.53 trillion, cost of sale rose to ₦252 billion (33% increase) while operating expenses came in at ₦738 billion. 

Data revenue outpaces voice 

Data revenue grew to ₦727 billion, outpacing voice revenue of ₦632 billion. Mobile money wallets increased to 5.5 million from 3.1 million recorded in H1 2023.

MTN also grew its customer base to 79.4 million despite barring 8.6 million subscribers in H1 2024. On Monday, the company closed its retail outlets nationwide after some of its offices were vandalised by angry customers whose SIM cards were blocked on Sunday.