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 per cent to N385, 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 N360-385, will reduce the EBITDA margin in 2020 by approximately 0.4 percentage points under IFRS16 financial reporting rules, MTN Nigeria said.
The company leases the majority of its tower and network equipment sites from IHS Towers and said it has concluded a renegotiation of certain terms of its rental agreements, MTN Nigeria said in a statement.
