20. PRIOR PERIOD ERROR
Leases
The Group adopted IFRS 16 Leases retrospectively from 1 January 2019, resulting in the recognition of right of use assets and lease liabilities. MTN Nigeria’s leases include network infrastructure relating to tower space, of which the lease consideration comprises of a combination of Naira based lease payments and a portion of the lease consideration that is indexed to United States Dollars (US$), but invoiced and paid in Naira.
During the year ended 31 December 2023, MTN Nigeria identified that the US$ portion of the lease liabilities has not been correctly remeasured for changes in exchange rates. As part of this review, MTN Nigeria also identified that significant changes in facts and circumstances relating to whether MTN Nigeria would exercise respective renewal options were not taken into account in determining the related lease term.
Foreign exchange losses on letters of credit
MTN Nigeria utilises trade lines to fund the establishment of confirmed irrevocable letters of credit for its largely US$ denominated network capital investments that sustain revenue growth. MTN Nigeria holds Naira denominated cash cover with banks, to support these facilities.
During the year ended 31 December 2023, the Group determined that in measuring foreign exchange losses, MTN Nigeria incorrectly remeasured all its trade lines after offsetting the Naira-denominated cash cover that was provided to the banks.
Results for the year ended 31 December 2023
The above-mentioned errors were corrected in the Group’s results for the year ended 31 December 2023.
20.1 Quantification of prior period error
The restatement had no impact on cash flows. The impact of the restatement on the prior period results is as follows (all related notes and affected financial risk management disclosures will also be restated):
|
Six months ended 30 June 2023 |
|||
|
Income statement (extract) |
As previously reported Rm |
Restatement Rm |
Restated Rm |
|
Depreciation of right-of-use assets |
(4 593) |
(20) |
(4 613) |
|
Finance costs |
(9 222) |
156 |
(9 066) |
|
Net foreign exchange loss |
(4 621) |
(10 183) |
(14 804) |
|
Profit before tax |
18 309 |
(10 047) |
8 262 |
|
Taxation |
(7 143) |
3 316 |
(3 827) |
|
Profit after tax |
11 166 |
(6 731) |
4 435 |
|
Attributable to: |
|||
|
Equity holders of the Company |
9 235 |
(5 094) |
4 141 |
|
Non-controlling interests |
1 931 |
(1 637) |
294 |
|
Basic earnings per share (cents) |
511 |
(282) |
229 |
|
Diluted earnings per share (cents) |
501 |
(276) |
225 |
|
Six months ended 30 June 2023 |
|||
|
Statement of comprehensive income (extract) |
As previously reported Rm |
Restatement Rm |
Restated Rm |
|
Profit for the year |
11 166 |
(6 731) |
4 435 |
|
Exchange differences arising on translating foreign operations including the effect of hyperinflation |
1 645 |
2 287 |
3 932 |
|
(Losses)/gains arising during the year |
1 645 |
2 287 |
3 932 |
|
Other comprehensive income for the year |
|||
|
Attributable to: |
5 889 |
2 287 |
8 176 |
|
Equity holders of the Company |
6 654 |
1 732 |
8 386 |
|
Non-controlling interests |
(765) |
555 |
(210) |
|
Total comprehensive income |
|||
|
Attributable to: |
17 055 |
(4 444) |
12 611 |
|
Equity holders of the Company |
15 889 |
(3 362) |
12 527 |
|
Non-controlling interests |
1 166 |
(1 082) |
84 |
|
Six months ended 30 June 2023 |
|||
|
Statement of financial position (extract) |
As previously reported Rm |
Restatement Rm |
Restated Rm |
|
Non-current assets |
|||
|
Right-of-use assets |
55 257 |
(4 674) |
50 583 |
|
Total assets |
404 177 |
(4 674) |
399 503 |
|
Equity attributable to owners of the company |
125 646 |
(5 475) |
120 171 |
|
Non-controlling interests |
4 528 |
(1 673) |
2 855 |
|
Total equity |
130 174 |
(7 148) |
123 026 |
|
Non-current liabilities |
|||
|
Lease liabilities |
56 424 |
4 157 |
60 581 |
|
Deferred tax and other non-current liabilities |
6 250 |
(3 521) |
2 729 |
|
Current liabilities |
|||
|
Interest bearing liabilities |
20 946 |
1 838 |
22 784 |
|
Total equity and liabilities |
404 177 |
(4 674) |
399 503 |