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Naira depreciation wipes out MTN’s profit amid stellar performance
MTN Nigeria Plc has recorded Foreign Exchange, forex loss of N740 billion in its financial year 2023, according to its report released on the Nigeria Exchange Limited, NGX, on Friday.
Consequently, the forex loss impacted negatively on its performance as it posted a loss before tax of N177.8 billion compared to a pre-tax profit of N518.8billion in the previous year.
Against this backdrop, Mr Karl Toriola, MTN’s Chief Executive Officer, said “despite headwinds, we remain optimistic and committed. We believe in Nigeria”.
The company’s audited results for the year ended 31 December 2023, as indicated by it resulted in a loss after tax amounting to N137billion. This sharp contrast was evident compared to the restated Profit After Tax (PAT) of N348.7 billion reported in 2022.
MTN stated that the repercussions of this financial decline extended to negative retained earnings and shareholders’ equity, reported at N208 billion and N40.8billion respectively, as of December 2023.
The reports stated that adjusting for the substantial net forex loss, the restated PAT would have been N344.5billion, reflecting a 14.3 percent decrease.
The report stated, “The significant devaluation of the naira in 2023 resulted in a materially higher net forex loss of N740.4billion (2022 restated: N81.8bn), reflected within net finance costs, which resulted in a reported loss after tax of N137bn compared to a restated PAT of N348.7billion in 2022.”
On 14 June 2023, the Central Bank of Nigeria announced changes in the Nigerian forex operations, which required the immediate collapse of all segments of the market into the investor and exporter window and reintroduced the ‘willing buyer, willing seller’ model to improve forex liquidity.
This led to a 96.7 percent movement in the exchange rate since the announcement of N907/US$ (NAFEM rate) at the end of December 2023 as the market seeks an equilibrium level.
MTN said this significant movement in the exchange rate impacted its operations especially its operating expenses and net been finance costs.
“The most significant of these exposures relate to the tower lease costs, which comprised the bulk of the 45-50 percent foreign currency exposure in our operating expenses in 2023.
“Our tower lease costs are recognised in line with IFRS 16 and IAS 21, which has had several impacts on our financial performance,” the company said.
Toriola also explained: “2023 witnessed a very challenging operating environment characterized 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 our business during the year.
The inflation rate increased throughout the year, reaching 28.9 percent in December 2023 – the highest reading in 18 years, with an average rate of 24.5 percent.”
The CEO said this was further exacerbated by higher fuel prices, arising from the removal of the fuel subsidy in May 2023, with the average prices of diesel and petrol up by 66.4% and 257.1 % in 2023 to N1,416.8/litre and N600/litre, respectively.
To mitigate the effects of these headwinds on its operations, Toriola said the company continued to invest in network infrastructure – with a disciplined focus on value-based capital allocation and efficiencies – to enhance capacity and expand coverage.
“This enabled us to meet the rising demand for data and, coupled with compelling and competitive propositions for our customers, accelerate the growth of our commercial operations,” he said.
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Supreme Court dismisses suit seeking to compel Federal Government’s disclosure of gas earnings
The Supreme Court has thrown out suit by the 36 state governments seeking to compel the Federal Government to account for its earnings from the sale of liquefied natural gas, natural gas liquids and related products since 1999.
In a unanimous judgment, a seven-member panel of the court, presided over by Justice Uwani Abba-Aji ruled that the court does not have the original jurisdiction to hear and determine the suit, which has the Attorney General of the Federation, AGF, as the sole defendant.
Justice Mohammed Lawal Garba, in the lead judgment, affirmed the preliminary objection raised against the suit by the AGF and held that the subject of the case had been dealt with by the Supreme Court in its earlier decision in the case of the Attorney General of Bauchi State against the AGF.
Justice Garba agreed with the defendant that the suit amounted to an attempt to re-litigate issues already decided by the Supreme Court in the AG, Bauchi v. AGF case, which relates to the revenues accruable to the government of the federation, which are payable into the federation account.
He held that the Supreme Court lacked the original jurisdiction to preside over and determine the case.
The judge proceeded to strike out the suit for want of jurisdiction to hear the case as presently constituted.
Other members of the panel, Justices Abba-Aji, Emmanuel Agim, Simon Tsammani, Stephen Adah and Jamilu Tukur, agreed with the lead judgment.
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N5m donation tears Celestial church apart, founder’s son disrupts service
The Celestial Church of Christ, Acts of Apostle Parish, Ketu, Alapere, Lagos, has been thrown into crisis following the donation of N5m by the church authority.
Saturday PUNCH gathered that the crisis erupted during a Sunday service last week when an acclaimed son of the church founder, Muyiwa Oluponna, stormed the church and disrupted service in an attempt to install himself as the shepherd of the church.
Oluponna allegedly seized the microphone from the acting shepherd of the church, Adetayo Adetola, during the sermon and claimed to have the right to deliver sermons every second Sunday of the month.
A viral video that circulated on social media captured the disruption and showed Oluponna and some members of the church engaging in a heated argument.
Our correspondent gathered that the development forced the church authority, through a task force, led by Akinbode Adjovi, to shut down the church for 40 days.
Narrating the incident to Saturday PUNCH, Adetola alleged that Oluponna demanded that the N5m donated by the church authority to the parish for renovation and construction of a clergy house be given to the family.
“That Sunday, our shepherd was not around and I was put in charge of the church. I was also assigned to give the sermon. We started the service and everything was going well until he (Oluponna) snatched the microphone from me, demanding to speak.
“I respected him and gave him the microphone because I knew him as a family member of the church founder. Immediately he collected the microphone, he said the N5m given to the church by the headquarters for renovation does not belong to the church but to the family of Oluponna who founded the church.
“He also demanded that money be given to the family, insisting that the church belongs to the family and not the community or the CCC authorities.
“He also demanded that he be made the church shepherd and be allowed to give sermons every second Sunday of the month. We all kept quiet until he finished.
“After that, I took over to deliver the sermon, but to everybody’s surprise, he came back and snatched another microphone from one of the choristers and came to the pulpit to give the sermon. That was when we all resisted him”, Adetola said.
Also speaking, the Shepherd of the church, Emmanuel Iperepolu, alleged that Oluponna had been causing trouble in the church, threatening him and other church members whom he perceived were against him.
Iperepolu said the incident had been reported to the church authorities and the police.
“I think the donation prompted him to do what he did, but before the issue of the money came, he had been coming to the church to threaten and abuse me and others. However, immediately after he heard about the donation, he came and demanded that the money be handed over to the family.
“He said the church belongs to the family of Oluponna, hence the money belongs to the family and not the church. The church authority has taken over the issue, and they have invited me and representatives of the family for questioning,” Iperepolu said.
Meanwhile, the Head of Media and Publicity of CCC, Kayode Ajala, said the church was shut down to prevent further breakdown of law and order.
“The church is a house of God but when things are going wrong and people’s lives are being threatened we have to do something.
“The church authorities cannot fold their arms and allow people to get killed; we have to intervene and this is why we shut down the church temporarily, while investigation is going on.
“All those involved in the conflict are being talked to and resolution is going on and once all that is done, the church will be reopened,” Ajala said.
When Saturday PUNCH asked about whether the church crisis was caused by the N5m donation, Oluponna declined to comment, saying the issue was between the family and the church.
Credit: PUNCH
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Empowerment projects now conduit for embezzlement – ICPC
The Independent Corrupt Practices and Other Related Offences Commission has raised concerns over what it described as politicisation of empowerment projects in Nigeria.
ICPC also revealed that empowerment programmes had become significant conduits for embezzlement and mismanagement of public funds.
This was revealed in the Phase VI report of the constituency and executive projects tracking exercise, which was released by the commission on Thursday.
A total of 1721 government-funded projects with a total value of N284, 602,881,868.57 were tracked during the exercise which spanned from November 2023 to May 2024.
In the report, the ICPC identified numerous instances where empowerment items, which are intended for poverty alleviation and to support the most vulnerable, were procured but hoarded by project facilitators for potential use in political campaigns.
The report added that of the total tracked projects, 26.1 per cent—or 449 projects—were categorised as empowerment initiatives, amounting to over N35.5 billion in contract awards.
The report partly read, “Empowerment items are meant to be distributed to intended beneficiaries to empower them or to serve as poverty alleviation items. These items were procured but hoarded by the project facilitators possibly for electoral campaign activities.
“Large-scale soft/fluid projects and empowerment projects as major conduits for siphoning public resources: Empowerment/soft projects deserve special attention in this report in view of their increasing propensity within the budget as more project sponsors now prefer to embed such projects for execution in the budget.
“In the course of Phase VI project tracking, it was discovered that the aggregate number of empowerment projects tracked amounts to 449 empowerment projects (26.1% of the total tracked projects), while the aggregate sum/value of contract award on empowerment projects is N35,585,340,728.91.
“In all the shenanigans found in the course of tracking empowerment projects, contractors, project facilitators as well as the executing agencies staff cannot be excused of gross connivance.
The ICPC further revealed that in agencies such as the North East Development Commission and the Hydro-Electric Power Producing Areas Development Commission, empowerment items were handed over to stakeholders instead of directly reaching the intended recipients.
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