MTN Nigeria reported a ₦519.1 billion substantial loss after taxes for the first half of 2024. The losses were mostly caused by Nigeria’s difficult macroeconomic circumstances, which included record-high inflation and a declining value of the naira.
Despite the challenges faced, MTN Nigeria recorded a 32.6% increase in revenue, amounting to 1.5 trillion.
Its unaudited statistics for the half-year ending June 2024 show that these losses were from the devaluation of liabilities denominated in foreign currencies, which were made worse by the naira’s fall from ₦907/ in December 2023 to ₦1,505/ in June 2024.
MTN, the largest corporation in Nigeria based on market value, reported that its revenue increased by 32.6% to ₦1.5 trillion in spite of the losses. Net FX losses of ₦887.7 billion, however, had a major adverse effect on the company’s financial performance.
Karl Toriola, CEO of MTN Nigeria, commented on the study and highlighted the challenging economic climate, pointing to the fact that the inflation rate averaged 32.8% for the first half of the year and reached 34.2% in June.
He continued by saying that if not for the forex losses, the corporation would have reported an after-tax profit of ₦102.3 billion.
Nigerian firms’ and telecom companies’ operating costs have increased substantially due to the country’s high rate of inflation and currency devaluation. Higher import costs for technology and services have resulted from these economic conditions, which has an impact on telecom operators’ entire cost structure.
Moreover, the profitability of large corporations has been negatively impacted by increased operating costs brought on by inflation and currency volatility, which has forced many of them to strike a balance between the challenge of offering consumers reasonable services and the requirement to maintain high-standard infrastructure.
While MTN Nigeria’s financial loss may have an immediate impact on dividend payments to shareholders, the company’s long-term profitability may be restored by revenue growth and strategic initiatives.
The corporation may also decide to change prices as a result of the economic challenges, but it will still work to strike a balance between affordability and sustainability.
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