Prime Business AfricaAfter a year of investing in MTN shares, hoping to receive dividends at the end of 2024, the company’s shareholders were not compensated.
The company’s inability to pay shareholders dividends is linked to the net foreign exchange (FX) losses of N925.36 billion MTN recorded in 2024.
Join our WhatsApp ChannelAn analysis of MTN’s audited consolidated and separate financial statements for the year ended December 31, 2024, by Prime Business Africa showed that MTN’s net foreign exchange losses increased by 209.36% year-on-year.
During the corresponding period in 2023, the telecommunications company reported net foreign exchange losses of N177.8 billion – revealing MTN’s significant exposure to naira devaluation through foreign loan repayment.
To reduce the exposure, MTN significantly reduced its outstanding letters of credit (LC) US-dollar obligations from $416.6 million as of December 31, 2023, to $20.8 million as of the end of last year.
However, due to the net foreign exchange losses, MTN recorded negative retained earnings of N607.5 billion, which is 192% higher than the negative retained earnings of N208 billion reported for the period of 2023.
Also, the net foreign exchange losses overshadowed the 36.03% year-on-year increase in the telecommunications company’s revenue, which rose from N2.46 billion reported in 2023 to N3.35 billion last year, as it led to MTN recording a loss after tax.
At the end of the reviewed period, MTN recorded a loss after tax of N400.43 billion, compared to the N137,02 billion loss after tax reported the year before — indicating a year-on-year increase of 192.24%.
The lack of dividends compounded the situation of MTN shareholders, as the value of their investments held in the network provider dropped by 25.51% within the period, after stock market investors’ interest in the firm’s shares declined.
As a result, MTN shareholders closed the period with a combined loss of N1.45 trillion between January and December 2024, compared to the combined gain of N589.65 billion or 7.8 percent investment growth recorded by shareholders of Airtel Africa in the same period.
Prime Business Africa’s analysis further showed that MTN’s market valuation also declined from N5.69 billion on January 1, 2024, to N4.24 billion on December 30, 2024, while Airtel Africa’s valuation rose to N8.10 trillion from N7.51 trillion.
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