By Fawaz Adebisi
MTN, the telecommunications giant, has reported a significant N131.4 billion foreign exchange loss due to the Central Bank of Nigeria’s forex policy, as revealed in its 2023 second-quarter report.
This led to a substantial 64% decrease in pre-tax profits, bringing it down to N44.6 billion.
For the first half of 2023, the company’s profits amounted to N200.3 billion compared to N268.6 billion during the same period in 2022.
The Q2 report also highlighted that MTN recorded revenue of N590.6 billion, representing a 23.3% year-over-year growth, along with a gross profit of N393.5 billion and operating profits of N214.9 billion, both indicating substantial YoY growth.
It stated, “pre-tax profits of N44.6 billion; forex losses of N131.4 billion; finance cost of N182 billion, representing over 259 per cent YoY; total debts of N855 billion, compared to N689.6 billion, recorded in December 2022; net assets of N258.2 billion, compared to N355.6 billion, recorded in December 2022 and working capital of N588.7 billion.”
In its reaction, MTN averred that the Central Bank of Nigeria’s recent forex policy caused a significant 60 per cent movement in the exchange rate to N756.24 per dollar by the end of June 2023.
Despite the challenging forex situation, MTN remains optimistic about the future, citing the potential benefits of the Central Bank’s forex system liberalization and the removal of fuel subsidies.
They believe these changes will attract foreign capital and spur foreign direct investment, ultimately leading to a positive long-term outlook, even though the immediate impact resulted in unrealized currency losses for H1.
