MTN, the Nigerian operation of Africa’s biggest telecom company by revenue and subscriber base is still struggling as indicated by the net loss
MTN Nigeria reported a first-quarter loss of negative N393 billion, according to its financial results released on Tuesday.
Like it was at the end of last year, the company’s financial position stayed in the red, with liabilities 12.6 per cent higher than assets this time around.
Shareholders’ fund, which turned negative at the end of last year, soared nearly ten times to N434.7 billion in just three months, heaping pressure on MTN Nigeria to urgently seek additional capital to clean its balance sheet.
The net loss indicates that the Nigerian operation of Africa’s biggest telecom company by revenue and subscriber base is not yet out of the woods after headwinds from exchange rate volatility for most of 2023 left net income and equity in the red last December.
Business activities were a sail through choppy waters for MTN Nigeria in the first quarter of the year as a devaluation of the naira in January set the local currency up for a descent to its weakest level ever in March while price levels soared to their peak in 28 years a month after, driving up operating expenses.
“The operating environment in the first quarter remained very challenging, with rising inflation and continued naira depreciation off an already low base,” said Karl Toriola, MTN Nigeria’s chief executive.
The helmsman gave the hint that cost efficiency and prioritisation of “value-based capital allocation” will govern spending going forward.
At N753 billion, turnover jumped about one-third higher compared to the 2023 level as income from data sales more than doubled to surpass the cash earned from voice services as the company’s top revenue source.
Subscribers dropped by two million quarter on quarter for what MTN Nigeria, in a separate document, said resulted from an order by the Nigerian Communications Commission asking telcos to link users’ SIM cards to their National Identification Number.
(c)Premium Times
