MTN Nigeria Communications Plc saw its shares plunge 9.1% in Lagos trading before recovering as investors reacted to the telecom giant’s second consecutive year of losses driven by the sharp devaluation of the naira.
The company reported a net loss of N399.45 billion ($266 million) for the year ending December 2024, a significant increase from the N133.8 billion loss recorded in 2023. The loss was attributed to foreign exchange losses arising from the revaluation of foreign currency obligations.
The naira depreciated by about 40% in 2024 following reforms aimed at loosening its peg against the dollar, though the currency has remained relatively stable since early December.
MTN Nigeria’s operating expenses surged by 76.6%, while its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin contracted by 9.6 percentage points. Despite these financial pressures, analysts believe the company could return to profitability in 2025, aided by a recent government-approved tariff hike and a more stable exchange rate.
“The increase in tariff and relative stability of the naira should be able to bring MTN back to profitability,” said Matilda Adefalujo, an equity analyst at Meristem Securities in Lagos. MTN Nigeria expects the tariff adjustment to boost service revenue growth and improve its EBITDA margin to “at least mid-40%” this year.
