MTN Nigeria Communications Plc and Airtel Africa Plc have reported N479.11bn in foreign exchange losses following the June 2023 devaluation of the naira.

In its nine-month financial report for the year, MTN recorded a forex loss of N232.8bn on its net foreign currency liabilities following the devaluation of the naira from 461/$1 in December 2022 to 777/$1 in September 2023.

It noted that its forex loss in the corresponding period of 2022 was N27.9bn. The firm further highlighted that given the scarcity of forex in the market, it had to rely significantly on letters of credit for its capital expenditure needs.

It said, “Given the protracted forex paucity in the market, MTN Nigeria utilised trade lines to fund the establishment of confirmed irrevocable letters of credit for its network capex investments to sustain revenue growth.

“Our recognised forex loss for the nine months to September 2023 was 77 per cent higher than the amount reported in H1 2023, where we measured all the trade lines after offsetting the naira-denominated cash cover that was provided to the banks. Following further analysis and review, we have remeasured all our trade lines to correctly exclude the naira-denominated cash cover that was provided to the banks.”

For Airtel, it recorded an after-tax foreign exchange loss of $317m.

It highlighted, “Loss after tax was $13m driven largely by a foreign exchange loss of $471m recorded in finance cost before tax and $317m after tax because of the devaluation of the Nigerian naira in June 2023. This impact has been classified as an exceptional item.”

Airtel expects the impact of the naira’s devaluation to eventually cost it $900m-$950m in annualised revenue.

It added, “The exceptional item of $471m is on account of derivative and foreign exchange losses following the Nigerian naira devaluation in June 2023 (from 465 NGN/USD in May 2023 to 752 NGN/USD in Jun 2023). This has resulted in an exceptional tax gain of $154m. Tax exceptional items in the previous period benefited from the initial recognition of a deferred tax credit of $42m in Kenya.”

Like MTN, Airtel also had issues with accessing the dollar due to illiquidity.

The firm said, “In some markets, we face instances of limited supply of foreign currency within the local monetary system. This not only constrains our ability to fully benefit at group level from strong cash generation by those OpCos but also impacts our ability to make timely foreign currency payments to our international suppliers.”

FX scarcity has been a major challenge in Nigeria in recent times, leading to a significant depreciation of the local currency in the parallel market.

According to the World Bank, the Nigerian naira is one of the worst-performing currencies in the region, losing 40 per cent of its value since the start of 2023.

Commenting on the scarcity of dollars in the country, the global bank said, “However, resistance toward the increasing pressure on the Nigerian naira coupled with limited supply of FX at the official window has led to the reemergence of the parallel market premium.”

The telecoms industry relies heavily on forex for its operations because most of its equipment is imported.

Recently, the Chairman, Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, tasked the government to introduce a special forex market for the industry.

He made the call when telcos met with the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, recently.

He said, “Liaise with relevant stakeholders such as the CBN for the institution of intervention measures to support the telecommunications sector. Such interventions could include the introduction of a special forex window for the industry, set-up of long-term, low interest infrastructure funding schemes, etc.”

Source: https://punchng.com/mtn-airtel-lose-n479bn-to-currency-revaluation/

Naija_Cover Is Just Observing MTN And AIRTEL

Good for them


The way airtel suck my data

I know one day they will lose their money 💰

They have been sapping our data since 2001, they'll still steal from us to cover their losses

They'll recoup from the poor masses, as usual

Don't worry, i promise you that by next year around march, Airtel and MTN will leave Nigeria because of tinubu and his trial and error economic policies, and GLO will shutdown.

They left their core business and started currency speculation, now Naira is gaining very fast against the dollar due to reduction in demand for luxury goods by many Nigerians and they are now crying just like the Nairalander who took advise from here to stock up on dollar at N1300 hoping it will get to N1500 in a few days only to see it crash below N1300 the next day and still going down further today

When the dollar was appreciating, and they where making horrendous profit up and down, them no complain...now wey naira don appreciate small, them dey shit for pant...

I no say na the customers go use their head carry am las las

One cow called Manna is coming to say this is good and we should patronise Glo, the same cow was shouting about foreign investment because Tinubu went to snap pishure in India.

600

Ok

They will transfer their aggression on their poor customers , sucking of data mood activated

Even if dollar hit N10,000, me and my household will never give up on this country. When MTN and Airtel were making billions of dollars in profit, did they complain or give any of their customers some of their gains? They should accept their loss as a part of doing business.

No wonder mtn is stealing our credits

they will recover with time

Not only naira, even Nigeria is undergoing devaluation. Sorry for your lose. You did not announce to us when you gained only to charge users more. Karma don catch nna

Bulaba effects

Ayoswit:
They will transfer their aggression on their customer , sucking of data mood activated

I'm Very Much Happy, For Them, Loosing That Money, After What Those NETWORK Cause Me

Serves them right, useless networks

FOOTSOLDIER2:
Tinubu and Yoruba people will drive foreign investors away with their propaganda government run by crooks and theives

low IQ don finish this one, you don't have any braincells left in your head.. Must you comment?

who cares....
they dont like it,they can fvck off to south africa....

south africa is such a useless miserable country....
they can all move their speculatin on currency than providin service....

tsdarkside:
who cares....
they dont like it,they can fvck off to south africa....

See More Update @ www.naija'cover. com

Hgf

Hmmm

Believe this report at your own.

These people wen thier accountants don dey help format their Books so that dem go fit Bobo us.

Abeg, if Business no pay una, make carry una Kaya dey go.

We get Glo and na our persin get am.

Fake news. The last time i checked, the lagos womderman was still in power and he's set the ball rolling.

FOOTSOLDIER2:
Tinubu and Yoruba people will drive foreign investors away with their propaganda government run by crooks and theives

Will the same policy drive banks that are now making over 200 percent profit as a result of currency revaluation away.?

Of course, we expect e- rodents like you who know next to nothing about the topic to jump in and exhibit your usual stupidity.

post=126809372:


I'm Very Much Happy, For Them, Loosing That Money, After What Those NETWORK Cause Me

very bad network....

they only care about dollar exchange....
stvpid basstards....!!

When dem dey gain declaring huge profits also nko

That's business...they will definitely make profit again