Isador
MTN, Africa’s largest carrier, has warned that it expects annual profits to fall by up to 90%.
MTN’s Nigeria operations, which have about 79 million customers and generate about a third of the company’s revenue, have seen an increase in operating costs, financial costs and foreign exchange losses as the naira has fallen 70% against the US dollar since June. are doing.
On March 25, the full-year results of the larger MTN Group will be announced. The telecoms giant recorded a 49% increase in mobile money transactions and a 45% increase in data traffic despite weakness in its Nigerian division.
Despite the operating company’s strong underlying performance, the rapid devaluation of the Naira against the US dollar had an adverse impact on MTN Nigeria’s financial results.
After the devaluation, about a third of the group’s revenue came from MTN Nigeria. Wireless operators, which do most of their business with trading partners in foreign currencies, lost 740 billion naira in net foreign currency terms last year due to the sharp rise in the value of the naira against the dollar.
MTN Nigeria, in a separate filing with the Nigerian Stock Exchange, reported a net loss of N133.8 billion in 2023 despite a 22% year-on-year increase in revenue. MTN Nigeria CEO Carl Triola said his company’s operating costs have increased since Nigeria’s long-standing currency peg was lifted and the naira was free to trade. Stated.
“This development has significantly increased the costs associated with MTN Nigeria’s tower leases, contributing to upward pressure on operating costs in Nigeria.” A statement was read. Since MTN Nigeria’s tower leases are pegged to the dollar, the company said it is estimated that 45-50% of its operating expenses are exposed to foreign currencies.
MTN and U.S.-listed IHS Towers, Africa’s largest independent tower operator, which leases nearly all of its 16,000 towers in Nigeria, have been at loggerheads over governance. MTN, which owns 26% of IHS, requested voting rights to represent its ownership.
MTN Nigeria announced in September last year that it would transfer leases for 2,500 towers across the country from IHS Towers to American Tower Corporation, with terms expiring this year and 2025. At the time, MTN claimed that the acquisition would allow it to reduce costs. Diversification of tower portfolio.