MTN Group Reports 69% Drop in Earnings Amidst Economic Challenges in Nigeria
MTN Group experienced a 69% drop in annual earnings, primarily due to the Nigerian naira’s devaluation and operational issues in Sudan. Headline earnings per share fell to 98 cents from 315 cents. MTN Nigeria reported a pretax loss of ₦550.3 billion, exacerbated by high inflation. Group service revenue decreased by 15%, but showed a 14% increase in constant currency, with a dividend increase to 345 cents per share.
MTN Group, Africa’s largest telecom operator, reported a significant 69% decline in its full-year earnings, attributing the decrease to the devaluation of the Nigerian naira and operational difficulties in Sudan. For the year ending December 31, its headline earnings per share (HEPS) dropped to 98 cents, down from 315 cents in the prior year, reflecting the severe financial impact of the currency’s instability.
The naira’s devaluation was a response to persistent dollar shortages in Nigeria, aimed at stabilizing the currency and luring investment. This economic environment, characterized by soaring inflation and interest rates, resulted in a dramatic increase in costs for MTN Nigeria, which saw its pretax loss expand by over 200% to ₦550.3 billion, equivalent to $355.76 million. Additionally, the ongoing armed conflicts in Sudan negatively affected MTN’s operational and financial performance, as stated by Group CEO Ralph Mupita.
Despite these challenges, MTN Group, serving 291 million customers across 16 African markets, reported a 15% decrease in group service revenue, totaling R177.8 billion, or $9.78 billion. When adjusted for constant currency, however, group service revenue demonstrated a 14% increase, illustrating resilience in some regions. The company also declared a final dividend of 345 cents per share, a slight rise from 330 cents the previous year.
In conclusion, MTN Group has faced significant financial challenges due to the devaluation of the Nigerian naira and conflicts in Sudan, leading to a drastic reduction in earnings. Despite these difficulties, the company showed resilience with positive revenue adjustments in constant currency and continued dividend payments, reflecting a cautious optimism in its operational strategies.
Original Source: www.zawya.com
