By Anthony O. Goriainoff
MTN Nigeria Communications, a subsidiary of MTN Group, has announced a decline in its first-half pretax profit due to higher costs. The company expects the full impact of Nigeria’s foreign exchange liberalization to be reflected in the second half.
Financial Performance
During the first half of 2022, MTN Nigeria recorded a pretax profit of 200.4 billion Nigerian naira ($258.2 million), compared to 268.6 billion Nigerian naira in the same period last year. The decrease is attributed to increased costs, including net finance costs and an unrealized foreign exchange loss of 131.5 billion Nigerian naira resulting from the devaluation of the local currency.
In contrast, earnings before interest, tax, depreciation, and amortization (EBITDA) witnessed a growth of 21% and reached 614.5 billion Nigerian naira. Furthermore, the company’s revenue rose from 950.1 billion Nigerian naira in the previous year to 1.158 trillion Nigerian naira.
Interim Dividend
MTN Nigeria’s board has approved an interim dividend of 5.60 Nigerian naira per share, remaining unchanged compared to the year-prior period.
Outlook
Despite short-term challenges such as the foreign currency devaluation and inflationary effects, Chief Executive Karl Olutokun Toriola expressed optimism. The company aims to achieve service revenue growth of “at least 20%” and an EBITDA margin within the range of 53%-55% in the medium term.