MTN Nigeria and Airtel Africa are rewriting their financial playbook, opting for stability over exposure.
After suffering heavy foreign exchange losses due to the naira’s sharp depreciation, both telecom giants took decisive action in 2024, repaying a combined $1.2 billion in foreign debt.
FX Losses From Naira Depreciation
Since the Central Bank of Nigeria (CBN) unified the forex market in 2023, the naira sharply depreciated.
As a result, both telcos suffered $1.56 billion in FX losses.
MTN recorded its first-ever loss of ₦137 billion, while Airtel Africa reported an $89 million loss due to currency devaluation in Nigeria and Malawi.
Aggressive Debt Reduction Strategy
To prevent further losses, MTN reduced its dollar-denominated obligations from $416.6 million to $20.8 million.
Likewise, Airtel repaid $739 million in FX debt, significantly lowering its exposure.
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By the end of 2024, Airtel ensured that 92 per cent of its debt remained in local currency, while MTN restructured its portfolio, shifting 72 per cent of its loans to naira.
Financial Performance And Cost-Cutting Measures
Even though MTN generated record revenues of ₦3.36 trillion, it still posted a ₦400.44 billion loss after tax, mainly due to forex losses.
Meanwhile, Airtel’s revenue dropped 5.78 per cent to $3.64 billion; however, its profit skyrocketed 12,300 per cent to $248 million.
To cut operational costs, both firms also renegotiated tower lease contracts.
Specifically, MTN secured ₦113.8 billion in savings through its deal with IHS.
Outlook For Recovery
Now, with regulators approving a 50 per cent increase in telecom tariffs and FX debt reduction efforts ongoing, analysts anticipate the sector’s recovery.
MTN and Airtel’s strategic actions continue to strengthen their financial stability amid Nigeria’s economic challenges.
