MTN Nigeria reports 29.14% decline in H1, cites FX challenges
By Kingsley Odii
MTN Nigeria, the leading telecommunications company in the country, has announced a significant decline in its profit for the first half of 2023. The company profit slumped by 29.14%, and was primarily attributed to inflationary pressures and foreign exchange concerns.
During the first six months of 2023, MTN Nigeria reported the profit decline, reflecting the challenges posed by inflation and foreign exchange fluctuations. The company’s financial statement reveals the impact of these factors on its overall performance.
In a statement, Karl Toriola, MTN Nigeria CEO, acknowledged the impact of these challenges on the company’s financial results.
He said: “The operating conditions in the first half of 2023 remained challenging with energy, food, and general inflation at elevated levels. This was due to the ongoing adverse global macroeconomic and geopolitical environment, the cash shortages experienced in Q1, forex volatility and availability and supply chain uncertainties witnessed during the period.
“As a result, the inflation rate in Nigeria rose to an 18-year high of 22.8% in June 2023, representing the sixth consecutive month-on-month increase in 2023, with an average of 22.2% in H1. To rein in inflation, the Central Bank of Nigeria (CBN) continued its monetary policy tightening, increasing the monetary policy rate by 2pp to 18.5% in H1, and a further 0.25pp increase in July.”
Despite the decline in profit, MTN Nigeria’s financial statement also highlighted positive growth in certain areas. The company’s revenue increased by 21.96% during the first half of 2023, indicating a resilient performance amidst the challenging macroeconomic conditions.
According to Toriola, MTN made some good financial strides in the following areas: Mobile subscribers increased by 4.0% to 77.1 million. Added 1.5 million subscribers in H1 2023. Active data users increased by 11.5% to 41.0 million. Added 1.5 million active users in H1 2023. Active mobile money (MoMo PSB) wallets increased by 1.1 million in H1 to 3.1 million. Service revenue increased by 21.6% to N1.2 trillion.
“As MTN Nigeria navigates the challenging operating environment, the company remains committed to delivering quality services to its customers while exploring strategies to mitigate the impact of inflation and foreign exchange challenges on its financial performance,” Toriola added.
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