MTN Nigeria has reported a loss for the first quarter in what the company described as a “very challenging” operating environment characterised by rising inflation and continued naira depreciation.
The company reported a loss after tax for the quarter ended March of 392.7-billion naira compared with a profit of 108.4-billion naira a year ago.
Total subscribers increased by 1.3% to 77.7-million in the quarter compared with a year ago, but declined by 2-million from the fourth quarter of 2023 due to the implementation of the national identity number-SIM directive, which affected the development of its user base, the company said in a statement.
Active data users increased by 8% to 44.5-million compared with a year ago, but was down 78,000 compared with the fourth quarter of 2023.
Active mobile money (MoMo PSB) wallets increased by 48.7% to 4.8-million.
Service revenue was up 32% to 747.3-billion naira.
Earnings before interest, tax, depreciation and amoritsiation (ebitda) declined 1.9% to 297-billion naira, with the Ebitda margin decreasing by 13.9 percentage points to 39.4%.
CEO Karl Toriola said the naira depreciated to a record low of 1,627 to the dollar in March from 907/$ at the end of December before moderating to 1,309/$ at the end of the March quarter. The inflation rate rose to 33.2% in March with an average rate of 31.6% in the quarter.
The Central Bank of Nigeria increased the monetary policy rate to 22.75%, which has driven up funding costs and caused “significant” difficulties for businesses operating in Nigeria by putting additional pressure on consumers, the cost of doing business and further forex losses, he said.
Toriola said continued elevated inflation and unpredictable foreign exchange rates remain significant challenges for the business. The group remains focused on sustaining its commercial momentum, accelerating service revenue growth and strengthening the balance sheet.
“We do, however, also require regulated tariff increases to restore the profitability of the company,” he said.
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