MTN Nigeria, the nation’s largest telecommunications provider with 80 million subscribers, reported a ₦400.44 billion loss after tax for the full year of 2024, extending its financial woes for a second consecutive year. This dramatic reversal of fortune, a sharp departure from years of profitability, is directly attributed to the sharp devaluation of the naira following President Bola Ahmed Tinubu’s election.
The country’s 70% currency plunge in 2024, coupled with persistent inflationary pressures and rising energy costs, has severely impacted MTN Nigeria’s bottom line. Despite a substantial reduction in US dollar debt obligations, slashing letters of credit from $416.6 million to $20.8 million, the company’s financial strain persists.
The telco hopes that the newly approved 50% tariff increase, naira stability and an expense efficiency programme will grow service revenue by 40% by the end of 2025. Possibly, this move will ensure a bounce back to profitability.
Despite a few drawbacks on the balance sheet, data soars high. MTN recorded ₦3.36 trillion in revenue year-on-year, 36.1 % higher than ₦2.46 trillion reported in 2023. The strong performance was driven by data which led 49% of the Nigerian subsidiary’s revenue, solidifying data’s dominance over voice.
Key takeaways
- MTN has 80.9 million mobile subscribers as of December 2024
- Active data users increased by 7% to 47.7 million in 12 months
- Active mobile money (MoMo PSB) wallets decreased by 46.6% to 2.8 million in 12 months
- Loss after tax was ₦400 billion as of December 2024
- Positive free cash flow of ₦388.2 billion
Data revenue grew to ₦1.5 trillion, overtaking voice revenue contributions to ₦1.3 trillion. The telco experienced a 42.9% increase in data traffic. In addition, data usage per user grew by 33.6% to 11.2GB, supported by the rising demand for data and digital services, which has contributed to revenue growth.
Fintech revenue grew to ₦106 billion, with a 46.6% drop in active mobile money wallets. The decision to streamline incentive structures in MoMo’s sales and distribution channels led to a drop in numbers. It also arouses the question if the MoMo service is gaining any adoption at all.
MTN Nigeria’s share price is unchanged ahead of pre-market trading on Friday. For patient investors, the stock has grown over 100% to ₦264 current share price from ₦174 sometime early December.
Still a negative shareholder fund of ₦356.2 billion will impact dividends collection. The telco is optimistic in providing dividends as it hopes to turn a profit in FY 2025.
“Despite facing significant macroeconomic headwinds, including record high inflation, as well as ongoing currency and energy price volatility, we remained focused on executing our strategy and creating long-term value for our stakeholders,” said Karl Toriola, MTN Nigeria’s CEO.
“We are grateful to the authorities for the recent approval of tariff adjustments, which are essential for our industry’s sustainability and crucial for addressing our negative capital position.”
Trading in MTN Nigeria shares has been suspended for 24 hours due to the mandated closed period following the earnings release.
