Telecommunications group MTN Nigeria on Monday reported a 16.3% increase in earnings before interest, taxes, depreciation and amortisation (Ebitda) to N907.9-billion during the nine months to September 30, 2023.

During the nine month period, MTN Nigeria’s Ebitda margin decreased by 2.4 percentage points to 51.2%.

Service revenue increased by 21.4% to N1.8-trillion, while capital expenditure (capex) increased by 6.9% to N405-billion.

Profit before tax (PBT) during the period under review decreased 42% to N232.5-billion weighed down by foreign exchange (forex) losses during the nine months ended September 30, 2023; however, adjusted for the forex loss, PBT was up 8.6% to N465.3-billion.

Similarly, the group’s earnings per share (EPS) decreased 45.2% to N7.06 kobo, but adjusted for the forex loss, EPS increased 5.2% to N14.50 kobo.

“The operating conditions in the first nine months of 2023 remained tough. This was in line with expectations following the removal of the fuel subsidy, the currency devaluation owing to the liberalisation of forex management and the impact of the 2023 Finance Act,” said MTN Nigeria CEO Karl Toriola.

The company in a trading update, said that, to manage the forex paucity prevalent in the Nigerian market, MTN Nigeria uses trade lines to fund the establishment of confirmed irrevocable letters of credit for its largely US dollar-denominated network capex investments that sustain revenue growth.

MTN Nigeria holds naira-denominated cash cover with banks to support these facilities.

“The significant depreciation of the naira against the US dollar, following liberalisation in June 2023, therefore, gave rise to unrealised forex losses relating to these trade obligations,” it said in the statement.

The liberalisation of the forex management resulted in a 68.5% increase in the exchange rate from N461/$1 in December 2022 to N777/$1 at the end of September.

“Further analysis and review, conducted after the release of first half of 2023 results, determined that in measuring forex losses for the first-half, MTN Nigeria incorrectly remeasured all its trade lines after offsetting the naira-denominated cash cover that was provided to the banks.”

Measuring the forex losses, to correctly exclude the naira-denominated cash cover, resulted in the recognition of additional unrealised forex losses on outstanding matured trade obligations at September 30 of N87.5-billion.

Meanwhile, during the nine months to September 30, 2023, MTN Nigeria added two-million subscribers, an increase of 4.8%, to total 77.6-million mobile subscribers.

During the period under review, active data users increased by 13.3% to 43.1-million, with 3.6-million active users added, while active mobile money wallets increased by 53.1%, or by 1.6-million, to 3.6-million.