This is due to the devaluation of the country’s currency, naira. The loss resulted in a wipe-out of shareholders’ funds, according to a Nairametrics report.
MTN Nigeria Plc recorded a loss before tax of N177.8 billion in 2023 compared to a pre-tax profit of N518.8 billion a year before.
The management of the company blamed it on a large foreign currency loss of N740 billion, an increase from N81 billion reported in 2022.
This is the company’s first loss since becoming a publicly traded corporation in Nigeria.
The company said that “the loss was significantly due to operational changes to the Nigerian Foreign exchange market, including the abolishment of the segmented/parallel structure announced by CBN in June 2023.”
MTN further claimed that it used an official (NAFEM) currency rate of N907.11/$1 as of December 31, 2023, implying that losses could be worse if the current exchange rate between the naira and the dollar persists by the end of March 2024, when it reports its Q1 results.
MTN Nigeria indicated that due to the significant currency devaluation and its impact on retained earnings, the Directors will not recommend a final dividend payment, resulting in a loss for the fiscal year ending December 31, 2023.
“2023 witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira,” the company added.
The fight to ensure the naira regains more value in the forex market has become more intense as the Nigerian government continues to clamp down on all platforms that trade FX without the Central Bank of Nigeria’s supervision.