MTN Nigeria’s stock plummeted 9.1% due to significant financial losses attributed to naira devaluation. The company reported a loss of 399.45 billion naira for 2024. Despite rising operational costs, MTN aims to restore profitability through increased tariffs and improved currency stability.
MTN Nigeria Communications Plc experienced a significant decline in stock price, dropping 9.1% to 240 naira amid investor responses to substantial financial losses. This marks the largest fall since April 2024, though the shares later recovered to unchanged levels during the trading session. The company reported a net loss of 399.45 billion naira ($266 million) for the year ending December, a steep increase from a loss of 133.8 billion naira in 2023, attributing these losses to forex impacts from the devaluation of the naira.
In 2024, the naira devalued by approximately 40% after reforms aimed at loosening its tie to the dollar, although relative stability has returned since early December. Matilda Adefalujo, an equity analyst at Meristem Securities, noted that MTN Nigeria has faced “significant challenges with its cost lines.” Operating expenses surged by 76.6%, leading to a reduction in the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, which decreased by 9.6 percentage points.
As the largest telecom provider in Nigeria, MTN indicated that recent government approval to increase service tariffs could enhance revenue and restore profitability, targeting an EBITDA margin of at least 40% by 2025. Adefalujo stated, “The increase in tariff and relative stability of the naira should be able to bring MTN back to profitability.”
MTN Nigeria faced substantial losses due to the devaluation of the naira, experiencing a drastic reduction in stock price. Despite these setbacks, the company anticipates a recovery through increased tariffs and currency stabilization. Investors are hopeful that these strategies will return MTN to profitability in the near future.
Original Source: businessday.ng
