Following its disappointing results report, investors booked early profits on MTN Nigeria Plc on the Nigerian Exchange (NGX) on Wednesday, resulting in another wave of selloffs. Due to shareholder selloffs, the telecom company’s share price dropped by 2.67%, bringing its market valuation down to N4.509 trillion.
The stock market’s “fallen angel” reached its peak value of N6.714 trillion in 2024, but it then reversed course due to subpar profit results.
On Wednesday, 2,818,570 shares of MTN Nigeria were traded on the market. The massive trade volume that was heavily skewed to the sell side weakened MTN Nigeria’s market momentum. Early in 2024, the telco reached its top at N319.80 as a result of significant buying activity based on the hope that earnings would continue to be good. However, the negative effects of the naira devaluation on its foreign exchange liabilities caused MTN Nigeria Plc to experience its worst nightmare in years.
Throughout the first quarter of 2024, the company’s FX loss continued, and it is having difficulty keeping its house clean. Although this has compelled management to come up with plans to lessen risk, experts predict that additional FX losses will have an effect on the company’s profitability in the first half of 2024.
MTN Nigeria recorded significant rise in FX losses due to the further devaluation of the Naira. The company recorded FX losses of N656.37 billion in Q1 2024. The FX losses led to a pre-tax loss of N575.69 billion in the first three months of operation, compared with a pre-tax profit of N162.91 billion in Q1 2023.
Despite N183 billion tax credit, MTN Nigeria Plc recorded a net loss of N392.69 billion in Q12024,4 compared with a net profit of N108.43 billion recorded in Q1 2022. EPS declined to negative N18.63/s in Q1 2024
