In our last post on October 14, 2024 (MTNN looking for Fibonacci Support), we covered MTN Nigeria’s (MTNN) performance and ongoing challenges. However, since then, concerns over Nigeria’s volatile exchange rates and rising operational costs have intensified, presenting greater obstacles for MTNN. As a result, foreign exchange losses, especially from naira depreciation, have substantially impacted the company’s balance sheet. For the recent quarter, MTNN reported forex-related losses that have weighed on its net earnings, resulting in a ₦519.1 billion loss despite solid revenue growth of 32.6% to ₦1.5 trillion, largely driven by increased demand for data services.

MTNN’s operational costs have spiked, particularly in areas requiring imported technology and network infrastructure, as exchange rate fluctuations inflate costs and limit cash flow. To address these issues, MTN Nigeria is exploring cost-saving initiatives, including renegotiated tower leases and investments in domestic infrastructure to mitigate reliance on imported resources. These measures are intended to stabilize margins as the company navigates Nigeria’s economic landscape, although forex volatility remains a primary risk factor.

Looking ahead, MTNN remains committed to expanding its digital services and data offerings, viewing Nigeria’s digital landscape as a high-potential market. However, investors should consider that short-term pressures from exchange rates and operational expenses may continue to impact profitability, suggesting a cautious outlook until greater economic stability returns.