MTN Nigeria expects slight margin drop after FX rate shift

ABUJA: MTN Nigeria expects its profit margin to dip by almost half a percentage point this year as its leased tower services feel the impact of weaker currency exchange rates, it said on Thursday.

The dollar conversion rate used by the Nigerian unit of South African telecoms group MTN weakened by 6.5% to 385 naira, it said, reflecting this month’s currency adjustment by the central bank to unify the country’s system of multiple exchange rates.

The change to reference rate, currently at 360-385 naira, will reduce the EBITDA margin in 2020 by approximately 0.4 percentage points under IFRS16 financial reporting rules, MTN Nigeria said.