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 impressive revenue of N590.6 billion, representing a remarkable 23.3 percent year-over-year (YoY) increase.
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.
However, in response to the Central Bank of Nigeria’s forex policy, MTN faced a challenging economic landscape. The forex policy caused a significant 60 percent movement in the exchange rate, bringing it to N756.24 per dollar by the end of June 2023.
As a consequence, MTN incurred a substantial foreign exchange loss of N131.4 billion, which had a notable impact on the company’s financials.
Despite the immediate impact of unrealized currency losses in the first half of the year, MTN remains optimistic about the future.
The company believes that the liberalization of the forex system and the removal of the fuel subsidy will attract foreign capital and stimulate foreign direct investment. MTN is confident that these measures will ultimately have a net positive impact on its longer-term outlook.
However, the forex loss did contribute to a significant decline in MTN’s pre-tax profits. The report reveals a notable 64 percent decrease in pre-tax profits, which amounted to N44.6 billion in the second quarter of 2023. As a result, the company’s half-year profits totaled N200.3 billion, compared to N268.6 billion during the same period in 2022.
In addition to the foreign exchange loss and declining profits, other financial indicators mentioned in the report include finance costs of N182 billion, representing a substantial YoY increase of over 259 percent.
The report also highlights MTN’s total debts of N855 billion, compared to N689.6 billion recorded in December 2022. Furthermore, net assets were reported at N258.2 billion, compared to N355.6 billion in December 2022, with working capital standing at N588.7 billion.
Despite the challenging economic environment, MTN remains committed to its strategies to navigate through these headwinds. The company aims to strengthen its financial position and continue its growth trajectory in the ever-changing telecommunications landscape.
As the global financial markets continue to evolve, MTN’s response to the shifting economic landscape will play a crucial role in determining its long-term success.
With a positive outlook on the horizon, MTN is focused on harnessing opportunities while managing potential risks, ensuring sustainable growth in the coming quarters.
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