Telecommunications giant MTN has released its second-quarter financial report for 2023, revealing both positive and challenging aspects of its performance during the period.
The report indicates significant revenue growth but also highlights the impact of the Central Bank of Nigeria’s recent forex policy, which led to a substantial foreign exchange loss and a decline in profits.
According to the Q2 report, MTN recorded an impressive revenue of N590.6 billion, representing a remarkable 23.3 percent year-over-year (YoY) increase.
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The company’s gross profit stood at N393.5 billion, reflecting a solid 22.9 percent YoY growth, while operating profits amounted to N214.9 billion, signifying a significant 24.3 percent YoY increase. These positive figures reflect MTN’s strong performance and market presence.
MTN, however, was up against a tough economic climate as a result of the Central Bank of Nigeria’s FX policies. By the end of June 2023, the exchange rate had been impacted by the FX policy by 60%, reaching N756.24 per dollar.
In turn, this caused a significant hit to MTN’s bottom line in the amount of N131.4 billion in foreign exchange loss.
Unrealized currency losses in the first half of the year had a negative effect on MTN’s bottom line, but the company is still optimistic about its long-term prospects.
Debt incurred in the quarter rose
The company anticipates an increase in FDI and foreign investment as a result of the liberalization of the FX system and the removal of the fuel subsidy. MTN is optimistic that these actions will improve its long-term prospects overall.
While MTN’s pre-tax earnings did fall, the forex decline was a major factor. The report shows that revenue before taxes dropped significantly by 64% to N44.6 billion in the second quarter of 2023. The consequence was a decrease in earnings to N200.3 billion for the half year, from N268.6 billion in the same period in 2022.
Finance expenses of N182 billion, indicating a significant YoY rise of almost 259 percent, are also cited in the report, along with the foreign currency loss and diminishing earnings.
MTN has N855 billion in indebtedness, according to the report, up from N689.6 billion in December 2022. In addition, working capital was reported at N588.7 billion, while net assets were recorded at N258.2 billion, down from N355.6 billion in December 2022.
MTN is steadfast in its plans to weather the storm despite the current economic climate. The firm’s goals are to fortify its financial footing and sustain its expansion in the dynamic telecoms market.
The ability of MTN to adapt to the changing economic environment will be important to the company’s long-term performance as the global financial markets continue to advance.
With an exciting period ahead, MTN is concentrating on capitalizing on possibilities while mitigating risks to ensure steady quarterly growth.