MTN Nigeria Communications Plc recorded a 768% increase in credit impairment charges to N23.87 billion in the nine months ended September 30, 2026, up from N2.75 billion in the corresponding period of 2025.
The N21.12 billion increase was largely driven by higher provisions for potential losses on customer receivables and amounts owed by related parties, according to the company’s unaudited financial statements.
A review of the financial disclosures showed that impairment charges on trade receivables increased to N15 billion from N2.38 billion, accounting for the largest portion of the company’s credit loss expenses.
MTN attributed the higher provision primarily to a reassessment of receivables associated with XtraTime, its service that allows eligible customers to obtain airtime or data in advance and repay subsequently.
The company also disclosed that N3.2 billion in receivable balances had been removed from its accounts after historical reconciliation differences associated with legacy systems were assessed as unrecoverable.
The disclosure highlights the financial risks associated with extending credit to telecommunications customers, particularly where repayment depends on subsequent account activity.
Beyond customer receivables, MTN recognised N8.74 billion in expected credit losses on amounts owed by related parties.
There was no corresponding charge for this category in the first nine months of 2025.
According to the financial statements, the related-party impairment followed management’s assessment of recoverability under International Financial Reporting Standard 9, taking into account the relevant subsidiary’s credit risk, financial performance and projected cash flows.
The development indicates that MTN is also reassessing the recoverability of balances within its wider corporate structure, rather than limiting its credit-risk provisions to external customers.
As of September 30, 2026, gross trade receivables stood at N113.34 billion, compared with N114.66 billion at the end of December 2025.
However, the allowance for expected credit losses on trade receivables increased to N39.10 billion from N27.30 billion over the same period.
Consequently, the allowance represented approximately 34.5% of gross trade receivables at the end of September, compared with 23.8% in December 2025.
For related-party receivables, the group’s gross balance increased to N53.36 billion from N39.36 billion, while the associated expected credit loss allowance rose to N8.74 billion from zero.
These movements show that MTN has increased its provisions against potential non-recovery of amounts due from customers and related entities.
Credit impairment charges are accounting expenses recognised to reflect expected losses on financial assets. They do not necessarily represent cash losses incurred during the reporting period.
In the third quarter alone, MTN recorded N7.28 billion in net impairment charges, compared with a net reversal of N363 million in the corresponding quarter of 2025.
The third-quarter charge was largely associated with related-party receivables, where the company recognised N8.71 billion in expected credit losses, partly offset by reversals in other categories.
Despite the increase in impairment expenses, MTN maintained strong overall financial performance.
The company reported revenue of approximately N4.61 trillion for the nine-month period, while operating profit rose to N1.99 trillion from N1.44 trillion in the corresponding period of 2025.
Profit after tax also increased to N1.17 trillion, indicating the company’s ability to sustain earnings growth despite higher provisions for potential credit losses.
Nevertheless, the increase in impairment charges introduces an additional consideration for investors assessing the quality of MTN’s receivables and the effectiveness of its credit-risk management.
The company’s future impairment expenses will depend partly on customer repayment behaviour, recovery of outstanding balances and the financial performance of related entities.
For MTN, maintaining stronger collection processes and managing credit exposure will remain important as its telecommunications and digital services businesses continue to expand.