Unimpressive Q1 2024 Result: MTN Nigeria Committed to Stay Resilient Amid Challenging Operating Environment
MTN Nigeria has expressed commitment to stay resilient amid tougher economic weather and a challenging operating environment after it delivered an unimpressive first quarter (Q1) result.
The company recently released Q1 2024 results showed revenue of N752.9 billion, up 32.5% compared to N568.1 billion for the same period in 2023. However, it reported a pre-tax loss of N575.69 billion, a sharp reversal from the N162.9 billion profit reported a year earlier.
The report reveals a significant loss for the company, signaling ongoing difficulties amidst Nigeria’s challenging economy. CEO of MTN Nigeria, Karl Toriola addressed the challenging operating environment, citing factors such as rising inflation and currency depreciation as significant contributors to the company’s financial struggles.
In his words,
“The operating environment in the first quarter remained very challenging. With rising inflation and continued naira depreciation off an already low base. The naira depreciated to an all-time low of N1,627/US$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) in March from N907/US$ at the end of December 2023, before moderating to N1,309/US$ by the end of the quarter. Additionally, the inflation rate maintained an upward trajectory, rising to 33.2% in March, with an average rate of 31.6% in the quarter”
Looking ahead, MTN Nigeria is committed to staying resilient amid a tough operating environment, by pursuing initiatives to address the negative capital position and restore profitability. These initiatives include seeking regulated tariff increases, implementing margin recovery strategies, optimizing capital expenditure, and reducing exposure to US dollar volatility.
Also, the company is considering strategic options to manage its tower lease contracts, if successful, could result in improvements that would help to mitigate macro risks impacting the business including FX.
