MTN Nigeria posts ₦137.0 billon loss for 2023 Financial year, declares no dividend

MTN Nigeria Communications Plc (NGX: MTNN) has posted a loss after tax of ₦137.0 billon for the financial year ended 31 December, 2023. Earnings per share (EPS) declined to negative ₦6.38 kobo.

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In an earnings release seen by Investogist, the telecoms giant attributed the loses to its net forex loss. Adjusted for net forex loss, the company stated that its profit after tax would have been ₦344.5 billion, while the EPS would be ₦16.56 kobo.

The company’s retained earnings that stood at ₦246.67 billion as at 31 December 2022 swung into an accumulated loss of ₦208.01 billion by 31 December 2023.

In light of the negative retained earnings, the board of directors of MTNNN did not recommend a final dividend for FY 2023. MTNN declared and paid an interim dividend of ₦5.60 kobo per 2 kobo ordinary share for the half year period ended 30 June 2023.

Aside the negative impact of forex on the company’s finances, MTNN reported growth in most of its commercial activities.

Total subscribers increased by 5.3% to 79.7 million
Active data users increased by 12.7% to 44.6 million
Active mobile money (MoMo PSB) wallets increased by 163.2% to 5.3 million
Service revenue increased by 22.4% to N2.5 trillion
Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 12.3% to N1.2 trillion
Capital expenditure (capex) increased by 13.2% to N571.0 billion (up 24.5% to N449.3 billion, ex-leases)
Free cash flow increased by 11.6% to N631.6 billion

ANALYSIS OF FINANCIAL STATEMENTS

Income Statement:

Revenue: MTNN earned a total revenue of ₦2.46 trillion, 22.7% year-on-year growth from the ₦2.01tn earned in 2022. Voice service accounted for ₦1.13tn of the revenue (2022: ₦1.03tn), while ₦1.06tn was earned from Data service (2022: ₦764.82bn). Fintech brought in ₦86.39bn (2022: ₦84.39bn).
Operating Profit: ₦773.46 billion, a growth on the ₦734.16 billion operating profit recorded in 2022.
Finance Income & Cost: Finance income was up 87.5% year-n-year to ₦25.81 billion from ₦13.76 billion, while finance cost was up by 60.9% from ₦236.92bn to ₦147.28bn.
Net foreign exchange loss: From a net foreign exchange loss of ₦81.82bn in 2022, the company’s loses skyrocketed to ₦740.43bn as a result of the depreciation of the Naira. While the company recorded foreign exchange gain of ₦93.84bn, it booked a foreign exchange loss of ₦834.28bn.
Loss Before Tax: MTNN posted a loss before tax of ₦177.88bn, down 134.3% from the profit after tax of ₦518.22bn reported in the preceding year.
Loss After Tax: ₦137.02bn, compared to ₦348.72bn in 2022 (139.3% YoY decline).
Earnings Per Share: N8.92 (N6.97 in H1 2021).

Balance Sheet:

Total Assets: ₦2.21 trillion, compared to N1.77 trillion as at 31st December 2022. Of these assets, ₦1.09tn is on property, plant and equipment. The company’s trade and other receivables went up from ₦191.49bn to ₦215.41bn.
Total Liabilities: ₦3.22 trillion, compared to ₦2.27 trillion as at 31st December 2022. MTNN’s lease liabilities went up from ₦591.17bn to ₦813.63bn, it’s trade and other payables went up from ₦514.89bn to ₦707.78bn while borrowings went up from ₦250.21bn to ₦689.35bn.
Shareholders’ Fund: went into negative, dropping from ₦262.84bn to minus ₦40.84bn.
Retained earnings: This swung into an accumulated loss of ₦208.01bn.

Cashflow:

Operating activities: ₦996.90 billion was generated from operating activities, against ₦963.66 billion generated in 2022.
Investing activities: ₦765.98 billion was used in investing activities, against ₦495.97 billion used in 2022. Most of the expenses was on acquisition of property and equipment.
Financing activities: ₦147.25 billion was used in financing activities against ₦270.08 billion used in 2022.
Cash and cash equivalents at the end of the period was ₦345.16 billion (2022: ₦349.78 billion).

About the Company

MTN Nigeria Communications Plc (the Company) was incorporated on 8 November 2000 as a private limited liability company. The Company was granted a licence by the Nigerian Communications Commission on 9 February 2001 to undertake the business of building and operating GSM Cellular Network Systems and other related services nation-wide in Nigeria.

The Company commenced operations on 8 August 2001 (commercial launch date). Currently, the Company holds a Unified Access Service License (UASL) in addition to a 2GHz Spectrum and Digital Terrestrial TV Broadcasting licence, in addition to others shown in note 20.7.

On 18 April 2019, MTN Nigeria Communications Limited re-registered as a public limited company, MTN Nigeria Communications Plc. The Company was listed by introduction on the Premium Board of the Nigerian Stock Exchange on 16 May 2019. The Company’s registered office is at 4, Aromire road, off Alfred Rewane Road, Ikoyi Lagos.

MTN Nigeria Communications Plc’s subsidiaries are XS Broadband Limited, Visafone Communications Limited, Yello Digital Financial Services Limited and MoMo Payment Service Bank Limited. Their principal activities are the provision of broadband fixed wireless access service, high quality telecommunication services and mobile financial services respectively.

The Group’s holding company is MTN International (Mauritius) Limited, a company incorporated in the Republic of Mauritius and its ultimate holding company is MTN Group Limited, a company incorporated in South Africa.

In 2022, the Company established a new subsidiary MoMo Payment Service Bank Limited (MoMo PSB). MoMo PSB is licensed by Central Bank of Nigeria (CBN) to facilitate high-volume low-value transactions in remittance services, micro-savings and withdrawal services in a secured technology-driven environment to further deepen financial inclusion in Nigeria. MoMo PSB commenced operations in 2022 and MTNN holds 80% of the voting shares while Axcani Limited holds 20% non-controlling interest.