Consequently, MTN’s retained earnings and shareholders’ equity turned negative, amounting to N723.0 billion and N573.6 billion, respectively, as of September 2024.
In his comments on the results, MTN Nigeria CEO Karl Toriola noted that had it not been for the forex revaluation losses, the company’s profit after tax (PAT) would have been N118.5 billion, down 59.2% year-on-year.
Adjusting further for forex impact on operating expenses, PAT would have risen 13.3% to N367.1 billion.
Subscriber and revenue insights
During the period, MTN Nigeria’s total subscriber base saw a slight decline of 0.9% to 77.0 million, primarily influenced by compliance with NIN-SIM regulations.
- In contrast, active data users increased by 5.1% to 45.3 million, while active mobile money (MoMo) wallets declined by 21.8% to 2.8 million.
- The telecom giant reported a robust increase in service revenue, up 33.6% to N2.4 trillion, demonstrating continued demand for its core services despite the challenging macroeconomic environment.
- The company’s recent renegotiation of its tower lease contracts with IHS Towers yielded savings in operating expenses, which positively impacted its earnings before interest, tax, depreciation, and amortization (EBITDA) margin by 2.3 percentage points.
However, EBITDA declined by 5.3% year-on-year to N860.2 billion, with the EBITDA margin decreasing by 14.9 percentage points to 36.3%.
Financial highlights
- Total subscribers declined by 0.9% to 77.0 million, while active data users rose by 5.1% to 45.3 million.
- Service revenue increased by 33.6% to N2.4 trillion.
- Negative Earnings Per Share (EPS) of N24.51 kobo; adjusted for forex loss, EPS would have been N5.65 kobo, down 59.2%.
- Retained Earnings and Shareholders’ Equity closed negative at N723.0 billion and N573.6 billion, respectively.
- Capex, excluding leases, decreased by 27.8% to N217.6 billion.
- Achieved a positive free cash flow of N536.8 billion, up 21.9%.
CEO’s comments
Commenting on the results, Toriola, said despite forex challenges, MTN Nigeria’s positive free cash flow, supported by favourable working capital movements and reduced capital expenditure, underscores its resilience in navigating the current economic landscape.
“As we manage the effects of the ongoing macroeconomic headwinds on our business, we remain focused on initiatives to accelerate our earnings recovery profile, strengthen our balance sheet, and restore our net asset position faster,” he said.
Toriola pointed out that MTN has continued to manage the effects of the Nigerian Communications Commission’s (NCC) industry-wide NIN-SIM directive, which has impacted the evolution of its customer base.
Having complied with the regulatory directive to disconnect some lines, the company is now working towards reconnecting those affected to reduce churn while extracting increased value from the market.
MTN Nigeria’s Q3 2024 report showcases growth in data and fintech services, but this comes amid notable financial challenges as the company recorded a significant ₦514.9 billion after-tax loss, primarily due to currency volatility. Techpoint reports that this loss is a major setback, reflecting the cost of Nigeria’s volatile economic environment, even as MTN continues to expand its digital services footprint.
