MTN Nigeria Communications Plc has successfully reduced its foreign exchange (FX) exposure from $416.6 million in December 2023 to $100 million. This achievement follows the renegotiation of tower contracts with IHS Towers and American Tower, as announced on the Nigerian Exchange (NGX) recently.
Airtel Nigeria has also fully cleared its $550 million FX exposure. Together, both operators have eliminated a total of $866.6 million in FX debt over the past six months, effectively mitigating losses from currency fluctuations.
The Central Bank of Nigeria’s decision to unify the foreign exchange market in June 2023 led to a significant depreciation of the naira, impacting MTN and Airtel’s financial performance. As of June 30, 2024, MTN reported foreign exchange losses totaling N975 billion.
Modupe Kadiri, Chief Financial Officer of MTN Nigeria, emphasized that these initiatives, along with commitments made during the company’s Extraordinary General Meeting on April 30, will help mitigate macroeconomic risks and support margin recovery.
The renegotiated agreements with IHS Towers and American Tower involve transitioning leases from US dollar-indexed to naira-based terms, effective April 1, 2024, with extensions up to December 31, 2032. These agreements also address rising energy costs by incorporating incentives and discounts, thus safeguarding against macroeconomic risks affecting the telecommunications sector.
MTN has established a trilateral relationship among MTN, IHS, and American Tower to manage 2500 towers transferred from IHS to ATC in September 2023. Under this arrangement, ATC will oversee 2100 sites, while IHS will manage 1400 sites. MTN plans to deploy an additional 1000 new sites in the near future, allocated between these tower companies.
Karl Toriola, Chief Executive Officer of MTN, expressed satisfaction with the renegotiation outcomes, highlighting a collaborative approach that benefits all parties involved and aligns with long-term strategic interests. “We are pleased with the successful renegotiation of our tower lease agreements with IHS and ATC, which reflect a collaborative and mutually beneficial outcome aligned with the long-term interests of all parties involved” he said.
