MTN, Africa’s largest telcom carrier warned that it expects annual profits to drop by as much as 90%.

On March 25, the full-year results for the larger MTN group will be revealed. The telecoms giant recorded a 49% increase in mobile money transactions and a 45% increase in data traffic, despite the setback to its Nigerian unit.

The sharp devaluation of the naira against the US dollar has negatively impacted MTN Nigeria’s financial results, despite the operating company’s solid underlying operational performance.

Following the devaluation, about one-third of the group’s income comes from MTN Nigeria. The wireless carrier, which does most of its business in foreign currencies with trading partners, lost N740 billion in net foreign exchange last year because of abrupt increases in the value of the naira relative to the dollar.

MTN Nigeria reported a N133.8 billion net loss in 2023 in a separate filing with the Nigerian Stock Exchange despite a 22% increase in revenue over the prior year. Karl Toriola, the CEO of MTN Nigeria, stated that the company’s operating costs had increased since the long-standing currency peg in Nigeria was lifted, allowing the naira to trade freely.

“This development significantly increased the costs associated with our tower leases for MTN Nigeria and contributed to the upward pressure on the cost of doing business in Nigeria,” the statement read. Since MTN Nigeria’s tower leases are dollar-indexed, the company stated that operating expenses are estimated to be 45–50% foreign currency exposed.

MTN and Africa’s largest independent tower operator, US-listed IHS Towers, which leases nearly all of its 16,000 towers in Nigeria to the company, have been at odds over governance. MTN, which holds 26% of IHS, has requested voting rights to represent its ownership interest.

MTN Nigeria earlier declared in September of last year that it would move from IHS Towers to American Tower Corporation for the leases of 2,500 towers nationwide on terms that would expire this year and in 2025. At the time, MTN claimed the acquisition would enable cost savings and portfolio diversification for its towers.