MTN Group, led by Zimbabwean executive Ralph Mupita, reported its first financial loss since 2016, mostly due to the weakening of the Nigerian naira.
The telecom company recorded a loss of R9.67 billion ($542 million) in the six months ending June 30, 2024. This contrasts considerably with the R4.43 billion ($248.4 million) profit achieved during the same time previous year.
MTN experienced its first loss since paying a $1 billion punishment levied by the Nigerian government in 2016.
The naira’s value has plunged by more than 70% against the dollar since President Bola Tinubu’s economic reforms began in May 2023, severely affecting MTN’s earnings.
MTN’s service revenue decreased by 20.8%, from R107.73 billion ($6.04 billion) to R85.32 billion ($4.78 billion).
MTN Nigeria, a major revenue provider, witnessed its service revenue decline from R43.58 billion ($2.44 billion) to R20.52 billion ($1.15 billion).
Despite the issues in Nigeria, MTN’s South African operations produced great results. South Africa’s revenue climbed by 3.3%, from R20.43 billion ($1.14 billion) to R21.11 billion ($1.18 billion).
EBITDA from South African operations increased by 4.3%, whereas MTN Nigeria’s EBITDA fell by 68.3%.
Ralph Mupita acknowledged the impact of macroeconomic issues on the group’s success while emphasizing operational capabilities in other areas.
“The devaluation of the naira and ongoing conflict in Sudan significantly impacted our results,” Mupita told journalists. He went on: “However, we remain optimistic about the progress made in other key markets.”
MTN Nigeria suffered R13.75 billion ($771.7 million) in foreign exchange losses as the naira fell from N907 to N1,505 per dollar during the reporting period.
These losses from unrealized and realized dollar-related trades resulted in the group’s first loss in years.
MTN’s financial difficulties highlight the vulnerabilities of global corporations operating in volatile currency markets.
The company is still navigating these issues while working to improve its performance in other locations.