MTN Nigeria has announced that it will hold an extraordinary general meeting with its shareholders on how to manage the capital loss it suffered in 2023.
According to a corporate notice filed with the Nigerian Exchange Limited on Tuesday, the EGM is scheduled for later in the month in Lagos.
The EGM notice showed that it would have only one special business which is: “To consider and discuss possible measures for addressing the loss of capital by the company for the year ended December 2023.”
MTN Nigeria recorded a depletion in its retained earnings and shareholder’s fund for the year under review due to a net loss after tax of N137bn, driven by a N740bn foreign exchange loss.
In highlights of its reports filed with the NGX, the telecoms firm noted that service revenue grew by 22 per cent to N2.5tn but recorded a N137bn loss after tax.
Net loss for the year has depleted MTN Nigeria’s retained earnings and shareholders’ fund to negative N208bn and N40.8bn, respectively.
The Chief Executive Officer of MTN Nigeria Karl Toriola, declared, “2023 witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira. These factors created severe headwinds for our customers and our business during the year.
“The significant devaluation of the naira in 2023 resulted in a materially higher net forex loss of N740.4bn (2022 restated: N81.8bn), reflected within net finance costs, which resulted in a reported loss after tax of N137.0bn compared to a restated PAT of N348.7bn in 2022. This has resulted in negative retained earnings and shareholders’ equity at the end of December 2023 of N208.0bn and N40.8bn, respectively.”
In terms of outlook, Kariola said, “We anticipate a challenging 2024 as we tackle the complexity and ongoing effects of high inflation and elevated forex volatility on our operations. Given the material uncertainty these present in the near term, we have suspended our medium-term guidance for EBITDA margins. We maintain the medium-term guidance for service revenue.
“In light of the negative retained earnings at the end of 2023, the board of directors has resolved not to declare a final dividend for 2023. Looking forward, we remain focused on sustaining our commercial momentum and accelerating our service revenue growth, improving the profitability of the business and strengthening the balance sheet.”(Punch)
