MTN widens losses to N392.69bn in Q1, shows sign of financial distress 

MTN Nigeria Communications Plc continues to perform poorly, posting a loss after tax of N392,694 billion in the first quarter (Q1) of 2024 due to the concentration of funds outside its core operations.

The company’s unaudited financial statements for the three months ended March 31, 2024, released on Monday, April 29, also indicate that the telecommunications giant is in financial distress.

A breakdown of the report shows that MTN Nigeria posted a loss after tax of N392,69 billion relative to a profit after tax of N108.43 billion in Q1 2023.


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The company reported an increase in revenue to N752.98 billion from N568.14 billion and a drop in operating profit to N174.08 billion from N206.62 billion.

Operating profit is the net income derived from a company’s core operations.

Despite the drop in operating profit, the loss after tax reported indicates that MTN Nigeria concentrated funds outside its core operations.

For instance, the company’s net foreign exchange loss widened by over 14,489 per cent to N656.37 billion from N4.499 billion. Its finance cost rose to N98.74 billion from N45.84 billion in the review period.

A cursory look at the Q1 report shows that the company’s financial position reflects its poor performance and suggests that MTN Nigeria is headed for insolvency.

At the end of the Q1 operation, the company’s total liabilities stood at N3.89 trillion, higher than its total assets value of N3.46 trillion, wiping out investors’ funds and leaving MTN Nigeria with a debt obligation of N434.724 billion.

The debt obligation widens by 964.35 per cent in Q1 2024 from N40.844 as of Q1 2023. 

According to the MTN Nigeria chief executive officer (CEO) Karl Toriola, the company is navigating a challenging operating environment.




     

     

    He said, “We expect 2024 to be a challenging year due to the rising inflation and devaluation of the naira. In January 2024, the inflation rate reached 29.9 per cent, while the exchange rate has further devalued to N1582/$ as at 26 February 2024.

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    “This is anticipated to put additional pressure on consumers, the cost of doing business and further potential forex losses.”

    The ICIR reports that MTN Nigeria reported a loss after tax of N137.0 billion in its 2023 full-year report, which was also due to the concentration of funds outside its core operations.

    This was the performance in 2023 despite the company’s subscriber base increasing by 5.3 per cent to 79.7 million, active data users rising by 12.7 per cent to 44.6 million, and active mobile money wallets increasing by 163.2 per cent to 5.3 million as of December 31.

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