MTN, Nigeria’s largest mobile network operator, has reported its biggest half-year loss ever, totalling a staggering N519 billion after tax for the first half of 2024.
This record loss represents a sixfold increase from the previous period and is roughly three times greater than the company’s total loss for the entire previous year.
In its latest earnings report released on Wednesday, MTN attributed the enormous loss to multiple factors, including the devaluation of the naira and rising operational costs.
The naira’s 31% devaluation in January, part of a broader initiative to unify Nigeria’s official and unofficial exchange rates, led to a significant increase in the company’s foreign exchange losses.
MTN’s net foreign exchange loss surged to N887.7 billion, up from N454.7 billion a year earlier.
Despite a 32.8% revenue increase to N1.5 trillion—driven largely by a 47.2% rise in data income—the company’s profitability was severely impacted by soaring inflation and escalating costs.
Operating profit declined by 27.7%, with direct network operating costs more than doubling to N586.7 billion and other operating expenses increasing by 103.3%.
The company’s loss before tax rose to N751.3 billion from N119.4 billion a year ago. Although MTN received a tax credit of N232.2 billion, which reduced the net loss to N519.1 billion, its shareholders’ funds remained negative at -N577.7 billion.
Assets totaled N3.3 trillion, while liabilities stood at N3.9 trillion.
Despite all, CEO Karl Toriola tried to be upbeat in his report to shareholders. He noted, “Despite barring 8.6 million subscribers in line with the NCC directive, we managed to limit the decline in our base to 280,000, resulting in a 2.9% year-over-year increase in our customer base to 79.4 million.
“Excluding OTC transactions, the number of MoMo agents was relatively flat at 239,000. We onboarded over 174,000 new merchants, bringing the total number of merchants within our ecosystem to approximately 498,000.”
Toriola also highlighted that the fintech ecosystem saw a 33.4% year-over-year growth in transaction volume.
“We will leverage the momentum in Q2 to accelerate the development of wallets and MoMo PSB app adoption as we expand our merchant ecosystem,” he said.
He elaborated on the company’s other achievements within the period: “We are pleased with the momentum in wallet adoption in Q2 following the pressure in Q1 from the NIN requirement for KYC validation, which affected approximately a million active wallets.”
Toriola noted that MTN’s instant messaging platform, Ayoba, accounted for 46.5% of the active base with 9.1 million monthly users, while subscriptions for rich media services made up 53.5% of the active base.
Amid these financial difficulties, MTN experienced operational disruptions this week. On Tuesday, the company temporarily closed all its offices in Nigeria following violent protests by subscribers whose phone lines were barred.
The unrest, related to the National Identification Number (NIN) linkage policy enforced by the Nigerian Communications Commission (NCC), led to vandalism at some MTN offices.
The NCC intervened, ordering the immediate reactivation of the affected lines to allow consumers time to complete their NIN verification.
MTN reopened its offices on Wednesday, reassuring customers that its shops were operational and its digital channels available 24/7.
