MTN’s FX-induced loss steals shine of record Q1 performance

…Profit would have doubled without FX loss

A N656.3 billion foreign exchange loss in the first quarter of 2024 has taken the gloss off what was an impressive financial performance by Nigeria’s largest company by revenues.

The huge FX loss, which arose as a result of a 30 percent devaluation of the naira in 2024, pushed MTN Nigeria to a second straight loss but a deeper look at the numbers reveal the telecommunications company’s fast growing business.

The firm grew revenues by 32 percent in the three months through March to N752.98 billion compared to N568.13 billion in the same period of 2023.

Data is now the biggest contributor to MTNN’s revenues, following a 53.4 percent surge to N349.5 billion that saw data revenues account for almost half (46.4 percent) of total revenues.

Voice revenues, which traditionally contributed the most to revenues before losing that spot to data in the three-month period, rose 14 percent to N318.9 billion.

Fintech revenues were a bit sluggish with only a 0.7 percent increase to N22.8 billion but an 88 percent surge in digital revenues to N13.6 billion was eye-catching.

Other service revenue also grew 38.6 percent to N42.4 billion, capping a trend of growth across all revenue sources for the telco.

MTNN’s share price was up for the third straight day Tuesday, rising 2.9 percent as at 1pm in Lagos, a sign that discerning investors looked beyond the one-off FX loss that drove MTNN to a rare loss.

For context, if the loss stemming from the naira devaluation is backed out, the company would have turned a profit of N263.7 billion, more than double (143.3 percent) the N108.4 billion recorded in the first quarter of last year.

Investment bankers have largely retained a BUY rating on MTNN’s stock despite the second straight loss declared in Q1 2024.