MTN returns to profitability despite N514b loss, FX crisis, inflation

•Operator reconnecting deactivated 17.5m lines

Though MTN Nigeria Plc recorded N4.1 billion profit in quarter three (Q3), the firm still posted N514 billion loss.

In the financial result for the nine months ending in September, the N514 billion loss is a 0.80 per cent decline from the N519.1 billion it declared for the six months ending in June, indicating a slowdown.

According to the financial report released on Thursday, MTN’s financial performance has been impacted by record-high inflation and the naira’s devaluation, worsening its business.

The telecoms operator also disclosed an adjusted profit after tax of N118.5 billion, reflecting a 59.2 per cent decrease compared to the previous year.

According to MTN, which boasts 77 million subscribers in Nigeria, inflation and high interest rates have weighed on consumers’ spending power, impacting business activity.

Nevertheless, the company expressed optimism about enhancing operational efficiency and driving growth in its commercial operations.

The telco stated that the naira closed at N1, 542/$ in September 2024, compared to N907/$ in December 2023, further exerting pressure on business activities.

Chief Executive Officer of MTN Nigeria, Karl Toriola, said: “In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions.”

Despite economic headwinds, the telco grew its service revenue by 33.6 per cent to N2.4 trillion, boosted by data revenue of N1.14 trillion.

Toriola explained that the inflation rate remained elevated amidst rising energy prices and naira depreciation, saying inflation averaged 32.8 per cent in the nine months (Q3 2024: 32.8 per cent) compared to an average of 24.5per cent in 2023 (Q3 2023: 25.5 per cent).

The MTN boss informed: “We disconnected 17.5 million revenue-generating subscriber lines, per the NCC’s directive. Although most of these lines have since been reconnected, it resulted in a net decrease of 2.7 million in our base.

“Notwithstanding, we experienced growth in our key business segments, highlighting the resilience in the demand for our data, voice, fintech and digital services, each delivering double-digit growth. This drove service revenue growth of 33.6 per cent outstripping the average inflation rate in the period,” he stated.

He disclosed that voice revenue rose by 13.8 per cent due to higher usage, supported by our customer value management (CVM) initiatives, stressing that the growth in voice accelerated in Q3 despite the NIN-SIM directive impacting the development of the firm’s subscriber base in Q3.

“We delivered a growth of 52.3 per cent in data revenue, driven by an expansion in user base and data usage. The growing demand for digital services, social media and streaming content has been crucial in driving data consumption. As a result, the average data usage per customer increased by 31.2 per cent, reaching 11.2 GB, while overall data traffic grew by 42.1 per cent,” he stated.