Broadcasting
MTN and its FY2023 Financial Results Abracadabra
By Abdullahi Taminu Bida
MTN Nigeria Communications Plc (MTN Nigeria), the leading telecommunication service provider in the country, on Thursday, 29 February, 2024, submitted its full-year audited report for the year ended 31 December, 2023 to the Nigerian Exchange (NGX). The report showed very impressive highlights like growths in total subscriber base, active data users, active mobile money (MoMo PSB) wallets, service revenue and earnings before interest, tax, depreciation and amortization (EBITDA). Despite all these positive highlights in the Statement of Accounts, the media and most analysts, as the MTN Nigeria would wish, ran with the forex loss of N740.4 billion as well as the loss before tax of N177.8 billion.
Karl Toriola, Chief Executive Officer, MTN Nigeria
According to MTN Nigeria, the losses are as result of “rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira. Karl Toriola, the Chief Executive Officer of the company, noted that “MTN Nigeria’s operations are exposed to foreign currency volatility on its operating and capital expenditure. The most significant of these exposures relates to the tower lease costs, which comprised the bulk of the 45-50 percent foreign currency exposure in our operating expenses in 2023.” Specifically, the company attributed the poor financial performance for the year under review mainly to the foreign exchange loss of N740.4 billion as a result of a 96.7 percent movement in the exchange rate from N461/$1 in December 2022 to N906/$1 in December 2023.
From media reports many of the analysts seem to look at the MTN Nigeria’s 2023 Financial reports from the prism of the company – harsh operational environment, unfavourable government policies and the general macro-economic conditions. They seem to be so convinced by the jaundiced narrative the telecom company has deliberately crafted to hoodwink stakeholders to its side that they barely look at the submitted report critically.
To start with, MTN Nigeria listed on the floor of the Nigerian Exchange in 2019 as part of its bargain with the government to have its $5.2 billion fine, for failure to disconnect its subscribers who were yet to link their National Identification Numbers to their telephone lines, slashed. Prior to the listing, MTN Nigeria was a private company and had no disclosure requirements unlike now, as a publicly quoted company, it is required to meet the disclosure requirements including the submission of quarterly results.
Let us highlight some of the items as disclosed in the report. The Loss after tax was N137.0 billion due to net forex loss; Profit after tax (PAT), adjusted for the net forex loss, decreased by 14.3 percent to N344.5 billion; Earnings per share (EPS) declined to negative N6.38 kobo (N16.56 kobo adjusted for the net forex loss, down 14.1 percent); the Net loss for the year resulted in a depletion of its retained earnings and shareholders fund to negative N208.0 billion and N40.8 billion, respectively; the Capital expenditure (capex) increased by 13.2 percent to N571.0 billion; and the company’s liabilities and assets were N3.22 trillion and N3.18 trillion respectively.
The report, as indicated, showed that the company’s liabilities are bigger than its assets, an admission that MTN Nigeria is technically insolvent. The reality is that this insolvency would remain for a long time without shareholder funding and may trigger default. This also throws up the going concern questions. How can MTN Nigeria’s auditors sign off the on the going-concern assessment of the company with such reality – a case of financial illiteracy or poor oversight?
Also, the issue of lease agreements leaves plenty room for suspicion. Is attributing an item that, according to the company, constitutes 45-50 percent of its foreign currency exposure without naming the service provider a deliberate ploy to conceal pertinent facts? It is a known fact that MTN has large ownership stakes in the companies that provide these lease services and the ‘losses’ the company posts as a result of the forex fluctuations, it ‘gains’ in form of returns on investment.
Similarly, the report indicated that MTN Nigeria changed its “measurement” of FX loses from “realized FX differences on dollar indexed leased” to the N/US$ spot exchange rate at the end of each reporting period. This, it claims, is in line with the IAS 21 and FIRS 16 and led to adjustments of 2021 and 2022 results. Why would MTN Nigeria limit the restatement of its lease liabilities to 2021 and 2022 only and not 2020 and 2019 financials when it got listed on the NGX? It is also curious that forex for the H1 2023 was not restated – when objectively there was nothing that could have triggered the IFRS 16 treatment to be altered in H2. In fact, the report showed that MTN Nigeria did a restatement on the H1 FX related transaction that was undertaken in October 2023.
These may be pointers to a possibility of sharp practices and willful concealment on the part of MTN Nigeria in contravention of the extant disclosure rules of the Exchange. This possible concealment, probably aimed at avoiding tax liabilities and/or shareholder obligations, should be of interest to industry stakeholders, in particular and Nigerians in general. MTN Nigeria’s over two-decade operations in Nigeria leaves much to be desired as there have been cases that border around corporate governance such as tax defaults, illegal repatriations of profits and other corporate vices.
Abdullahi Taminu Bida, writes for Abuja
Competition and Consumer Protection Tribunal (CCPT) in Abuja has dismissed a class action suit filed by one Uche Diala and 961 other DStv and GOtv subscribers against MultiChoice Nigeria and the Federal Competition and Consumer Protection Commission (FCCPC), citing lack of jurisdiction.
The suit challenged MultiChoice’s subscription price increases in November 2023 and May 2024, which the claimants described as arbitrary, exploitative, and unfair.
Diala and others sought to reverse the hikes and compel the company to adopt a more flexible billing model, such as a pay-as-you-view system used in other countries like South Africa.
They also accused MultiChoice of price discrimination against Nigerian consumers.
MultiChoice, through its counsel, raised a preliminary objection, arguing that pricing decisions do not fall within the tribunal’s remit and that the suit was improperly filed as a class action without first seeking the tribunal’s leave.
In its ruling on Thursday, the tribunal’s three-member panel led by Justice Thomas Okosun held that the core issues raised, which were pricing and tariff regulation, fall under the exclusive purview of the executive branch, particularly the President, as stipulated under the Price Control Act.
“The issue of price regulation is a matter that falls within the exclusive purview of the President of the Federal Republic of Nigeria,” Okosun stated.
While the tribunal acknowledged it holds both original and appellate jurisdiction under the FCCPC Act, it emphasized that such authority does not cover general price control unless abuse of market dominance is established—a point the claimants failed to prove.
On the procedural matter of filing a class action without prior approval, the tribunal noted that although it is ideal to obtain leave, failure to do so was not fatal in this instance since the claimants demonstrated a shared grievance and common interest.
Nonetheless, the tribunal upheld MultiChoice’s objection, ruling that it lacked jurisdiction to adjudicate the matter.
“The preliminary objection of the first defendant succeeds,” the panel held. “This suit is accordingly struck out for want of jurisdiction.”
This ruling follows a similar outcome on May 8, when a Federal High Court in Abuja upheld MultiChoice’s price increases after the company sued the FCCPC.
In that judgment, Justice James Omotoso declared that the FCCPC lacked the authority to fix or suspend subscription rates.
MultiChoice Nigeria has slashed the price of its DStv decoder from N20,000 to N10,000, representing a 50 percent drop, in a aim at attracting attract more customers and curb declining subscriptions.
The campaign, titled “We’ve Got You,” was launched on June 16 and will continue until July 31.
Also, as part of its efforts to ease economic pressure on households and improve access to digital TV services, the campaign offers a free upgrade for both active and returning customers.
Speaking on the campaign, John Ugbe, chief executive officer (CEO) of MultiChoice Nigeria, said the initiative reflects the company’s commitment to rewarding loyalty and enhancing daily viewing experiences.
“We want to ensure our customers feel appreciated and have access to the best entertainment every day,” Ugbe said.
“The ‘We’veGot You’ campaign is about making premium content more accessible and showing that DStv offers something for everyone, not just football fans.
“By repositioning itself as a platform for daily value, DStv aims to encourage content discovery across a wider array of genres, including movies, drama, kids’ programming, and news.
“This means more channels, more shows, and more reasons to tune in every day.”
The development comes amid MultiChoice Nigeria’s legal battle with the Federal Competition and Consumer Protection Commission (FCCPC) over price hike.
Federal Competition and Consumer Protection Commission (FCCPC) will, on Oct. 7, arraigned the Chief Executive Officer (CEO) of Qatar Airways, Mr Temi Birdzell, alongside the company and its top officers, over allegations bordering on breach of FCCPC Act, 2018.
The defendants will be arraigned before Justice James Omotosho of the Federal High Court in Abuja.
Others to be arraigned with Birdzell are Stella Ihediwa, the Account Manager of the airline; Kennedy Chirchir, the Country Manager and Eva Ojeje, who is the Sales Manager of the company.
Although the arraignment was scheduled for Tuesday, the matter could not proceed.
Upon resumed hearing, none of the defendants was in court.
When the matter was called on Tuesday, none of the defendants was in court due to improper service of the court documents, including the hearing notice, on them.
FCCPC.’s lawyer, Chizenum Nsitem, told the court of their inability to serve four of the defendants, although the company was served.
Nsitem then sought an adjournment to enable them do the needful and the judge adjourned the matter until Oct. 7 for the defendants to take their plea.
The News Agency of Nigeria (NAN) reports that the commission, in the charge marked: FHC/ABJ/CR/200/2025, dragged Qatar Airways, Birdzell, Ihediwa, Chirchir and Ojeje to court as 1st to 5th defendants respectively.
FCCPC, in the application dated May 26 but filed May 27, had preferred a two-count charge against the defendants.
The defendants were alleged to have failed to appear before FCCPC in compliance with a lawful summons of the commission dated Sept. 6, 2024, and thereby committed an offence contrary to and punishable under Section 33 (3) of the Federal Competition and Consumer Protection (FCCPC) Act, 2018.
They were also accused to have on Sept. 18, 2024, intentionally withheld the production of documents in compliance wth a lawful summons of the commission, thereby committed an offence contrary to and punishable under Section 111 of FCCP Act, 2018.
In count three, they were alleged to have on Sept. 18, 2024, engaged in the contravention of the consumer rights, thereby committed an offence contrary to Section 124(1) and punishable under Section 155 of the same Act.
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