MTN Nigeria has reported a significant dip in half-year 2023 profit after Airtel Africa suffered a similar fate in the first quarter of the year due new government policies that burdens citizens.
Last week, Airtel Africa reported a $151 million loss in Q1 2023, compared to the $178 million profit after tax it made during the same period in 2022. Airtel blamed their losses mainly on shaky foreign exchange market.
Now, MTN Nigeria is reporting something similar. While this telecom giant reported ₦128 billion ($165 million) in profit for H1 2023, it is at least 29.14% shy of the ₦181 billion ($234 million) it recorded in H1 2022.
According to MTN Nigeria’s CEO Karl Toriola, it’s all due to the policy changes Nigeria has experienced in the first half of the year.
Since he came into power in May 2022, President Bola Ahmed Tinubu has removed the country’s long-standing fuel subsidy and floated the naira to create a unified foreign exchange rate.
Karl Toriola notes that these actions have created “additional financial burdens” for MTN users in the short term.
Despite its significant reduction in profits, MTN Nigeria still recorded growth in other areas. It reportedly gained 1.5 million new subscribers in H1, taking its total to over 77 million subscribers.
Its services revenue grew by 21.6%, driven by voice revenue growth of 12.1% and data revenue growth of 34.9%. Active mobile money (MoMo PSB) wallets also grew by 1.1 million in H1 to 3.1 million.
MTN is not everywhere we go out of the woods yet. The telecoms stressed that unrealised forex losses included in its net finance charges affected the telco, adding that there was no impact on EBITDA due to the quarterly nature of its tower contracts. However, it expects a full impact by the end of H2.
