MTN’s record N3trn revenue overshadowed by N400bn loss

MTN Nigeria Communications Plc’s record revenue of N3.36 trillion for 2024 was overshadowed by a loss after tax of N400.44 billion, according to the company’s financial results.

The record revenue was a 36.03 percent bump from the N2.47 trillion reported in 2023, while the telco’s loss climbed by 192.25 percent from the N137.02 billion for 2023. MTN’s financial performance continues to be impacted by record-high inflation and the naira’s devaluation, exacerbating the businesses’ operational expenses.

The telco’s net foreign exchange losses, a recurring feature since the Central Bank of Nigeria unified the foreign exchange market, increased by 24.98 percent to N925.36 billion from N740.43 billion in 2023. MTN noted that the naira depreciated to N1,535/$ by the end of 2024 from N907.1/$ as of 31 December 2023.

“These headwinds significantly impacted MTN Nigeria’s costs, particularly those related to tower leases and other foreign currency obligations,” said Karl Toriola, chief executive officer of MTN Nigeria.

The company noted it would have recorded a profit after tax (PAT) of N247.3 billion if not for its net foreign exchange loss.

Airtel Africa recently reported that its profit after tax grew by 12,300 percent to $248 million in the nine months ending December 2024 from $2 million in the corresponding period of 2023, despite a 5.78 percent decline in revenue to $3.64 billion from $3.86 billion.

It noted that its revenue decline was due to currency devaluations in Nigeria, Malawi, and Zambia. “In particular, the Nigerian naira devalued from a weighted average NGN/USD rate of 677 in the prior nine-month period to NGN/USD 1,532 in the current period,” it said.

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A breakdown of MTN’s financials showed that data continues to be the key revenue driver with N1.59 trillion, a 49.08 percent increase from the N1.07 trillion recorded in 2023. Voice revenue amounted to N1.30 trillion, a 14.53 percent increase from the N1.14 trillion recorded in 2023.

The increase in data revenue was driven by increased smartphone penetration, with data traffic climbing by 42.9 percent and the average data usage per subscriber growing by 33.6 percent, reaching 11.2GB (with a 37.9 percent increase to 13.2GB in Q4).

MTN highlighted that its subscriber base increased to 80.9 million, an increase of 1.6 percent despite the effects of the Nigerian Communications Commission’s (NCC) NIN-SIM directive, and active data subscribers grew by seven percent to 47.7 million.

The telco remains upbeat about its future outlook and is focused on restoring a positive net asset position in 2025. The telco highlighted that the recent tariff hike will boost its 2025 revenue by at least 40 percent and help it increase its capex intensity.

Toriola added, “In terms of our balance sheet, we aim for a recovery in our retained income and shareholders’ equity positions to positive balances within the next 12 months.

“However, the near-term uncertainties in our macro environment, including exchange rate and potential price elasticity from the new tariff implementation, may impact the trajectory of our recovery. We will monitor developments and update our stakeholders as appropriate while we continue to drive our growth ambitions.”

Impact on Group Result

MTN Group noted in a trading statement on Thursday that it expects MTN Nigeria’s result to continue to weigh down on its performance. It stated that its financial results remain affected by several external factors, including the negative impact of local currency devaluation for the full year of 2024, particularly the naira against the US dollar.

“This included both translation effects and forex losses in our financials. An additional factor impacting our results is the operational challenges in Sudan due to the ongoing conflict in the country,” it said.

However, the group expects to report a strong underlying performance for 2024 despite the challenges in the operating environment. It highlighted that this is due to the relative stability of some important key macroeconomic indicators in the second half of 2024, such as inflation and foreign exchange (forex) rates in some of its key markets.

For its larger operations, MTN Group expects that improvement in the trajectory of MTN South Africa’s profitability and strong operational performances in MTN Nigeria, MTN Ghana, and MTN Uganda will shape its financial result.

It further stated that tariff adjustment approvals in Nigeria, announced in January 2025, will ensure the long-term sustainability of its business and the telecoms industry. “MTN Nigeria has started to implement the tariff adjustments, which represent an important step towards addressing the impacts of the prevailing economic challenges on the operation,” it said.

MTN Group expects a 20 percent drop in financial performance for the full year 2024, and expects to report a decrease in earnings per share (EPS) of greater than 100 percent (or within a range of -781 cents and -736 cents), a decrease in headline earnings per share (HEPS) of between -79 percent and -59 percent, and a net loss on the disposal of investments in joint ventures and/or associate and/or subsidiary of approximately -36 cents, among other things.