MTN Nigeria, the local subsidiary of Africa’s largest mobile network operator, discloses a significant financial downturn with a loss before tax amounting to N177.8 billion, a stark contrast to the N518.8 billion pre-tax profit reported the previous year.
The losses have led to a complete wipe-out of shareholders’ funds.
Forex Woes and Operational Changes Impacting MTN’s Finances
The primary driver behind MTN Nigeria’s unprecedented loss is a substantial foreign currency loss, reaching N740 billion, a notable increase from the N81 billion reported in 2022.
This financial setback marks the company’s first-ever loss since becoming a quoted entity in Nigeria.
The losses are attributed to operational shifts in the Nigerian foreign exchange market, particularly the abolition of the segmented/parallel structure announced by the Central Bank of Nigeria (CBN) in June 2023.
Exchange Rate Dynamics and Potential Widening Losses
MTN discloses that the official exchange rate used for its financial reporting is N907.11/$1 as of December 31, 2023.
However, the company suggests that the losses could expand further if the current exchange rate between the naira and dollar persists by the end of March when it publishes its Q1 results.
The liberalization of the forex management in June 2023 resulted in a significant upward movement in the exchange rate, from N461/$1 in December 2022 to N777/US$ by the end of September 2023, leading to higher operational costs.
CEO’s Insights on Business Dynamics and Fintech Momentum
MTN Nigeria’s CEO, Karl Toriola, sheds light on the business dynamics, acknowledging challenges posed by the forex losses and exchange rate fluctuations.
Despite the financial setbacks, Toriola highlights the momentum in the fintech business, with active wallets rising to 3.6 million and an expanding ecosystem demonstrated by the presence of over 293,000 MoMo agents and 197,000 merchants.
Conclusion: Navigating Challenges and Focusing on Fintech Growth
As MTN Nigeria grapples with its first-ever financial loss, attributed to forex challenges and operational shifts, the company remains focused on its fintech business.
The CEO’s optimism regarding the recovery of the fintech sector and the underlying momentum in the ecosystem suggests strategic efforts to navigate challenges and capitalize on growth opportunities in specific business segments.
Share on Facebook «||»
Share on Twitter «||»
Share on Reddit «||»
Share on LinkedIn
Forex Turnover At IE Window Falls By 51% In January 2022: In the month of January 2022, Nigeria recorded a forex turnover of $2.18 billion at the I&E window, where forex is formally traded, a 50.8...
UAE aims to increase size of economy from AED1.4 trillion to AED3 trillion by 2030: Abdullah Al Marri: UAE aims to increase size of economy from AED1. 4 trillion to AED3 trillion by 2030: Abdullah Al Marri SHARJAH, 24th February, 2022 – Abdullah...
London’s Creative Businesses Thrive with £190 Billion Annual Turnover: Before the pandemic, only a small fraction of the population, about one in five people, worked from home. These individuals were often freelancers seeking out...
Tragic incident as 296 people are killed with families wiped out and hundreds wounded following an enormous earthquake in Morocco.: “Deadly 6.8-Magnitude Earthquake Strikes Morocco, Leaving Hundreds Dead and Injured” Morocco experienced its most significant earthquake in over 120 years, as a devastating 6.8-magnitude quake...
UAE’s non-oil foreign trade records 27% growth in 2021 totalling nearly AED 1.9 trillion: UAE’s non-oil foreign trade records 27% growth in 2021 totalling nearly AED 1. 9 trillion ABU DHABI, 27th February, 2022 – The total value of...
iGaming Industry Surpasses £100 Billion Milestone in Cumulative Company Sales: In a groundbreaking revelation, the iGaming industry has surpassed the £100 billion mark in cumulative company sales. The year 2023 stands out as a record-breaking...
MTN Reports ₦137.0 Billion Loss for 2023, Struggles with Tower Lease Expenses and Currency Crisis: MTN Nigeria, the telecommunications giant, reported a significant loss for the full year 2023, marking its first annual deficit in three years. The company disclosed...
Obesity Surpasses Hunger as Global Health Menace, Affecting One Billion Individuals: In a historic declaration, obesity has been identified as a more significant health threat than hunger, impacting one billion people worldwide. A comprehensive study reveals...
Tony Blair’s Think Tank Hits £100 Million Turnover Amid Labour’s Rising Polls: “Record-Breaking Year for Tony Blair’s Think Tank” Tony Blair’s think tank, the Tony Blair Institute for Global Change (TBI), achieved a remarkable £100 million in...
Nigeria urged to seize $3 trillion Nanotechnology market opportunity: By Ijeoma Olorunfemi Chief Uche Nnaji, the Minister of Innovation, Science, and Technology, emphasised the need for Nigeria to leverage the global nanotechnology market, projected...