MTN Nigeria has declared that it will hold an extraordinary general meeting with its shareholders on managing the capital loss it suffered in 2023.
According to a recent corporate notice filed with the Nigerian Exchange Limited, the EGM is scheduled for later in the month in Lagos.
The EGM notice showed that it would have only one special business: “To consider and discuss possible measures for addressing the company’s loss of capital 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 of US$103 million after tax, driven by a US$560 million foreign exchange loss.
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 business during the year.
“The significant devaluation of the naira in 2023 resulted in a materially higher net forex loss, reflected within net finance costs, which resulted in a reported loss of US$103 million after tax. This has resulted in negative retained earnings and shareholders’ equity at the end of December 2023 of US$157 million and US$30 million, 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. We remain focused on sustaining our commercial momentum and accelerating service revenue growth, improving the business’s profitability and strengthening the balance sheet.”
