MTN Group’s Annual Profit Declines Amidst Currency Challenges in Nigeria
MTN Group experienced a 69% decline in annual profits due to the Nigerian naira devaluation and issues in Sudan. The company’s earnings per share dropped significantly, while losses in Nigeria escalated over 200%. Efforts to restore profitability are underway, with some signs of recovery. The group’s service revenue declined overall but showed growth in specific sectors, particularly in South Africa.
MTN Group, the largest telecom operator in Africa, reported a staggering 69% decrease in its full-year earnings, primarily due to the devaluation of the Nigerian naira and ongoing difficulties in Sudan. According to the recent financial results, MTN’s reported headline earnings per share (HEPS) plummeted to 98 cents for the year ending December 31, down from 315 cents the previous year.
The devaluation of the naira stems from chronic dollar shortages in Nigeria, leading government authorities to take measures aimed at stabilizing the currency and attracting investment. This economic climate, compounded by soaring inflation and interest rates, caused MTN Nigeria’s pre-tax losses to escalate more than 200% to 550.3 billion naira ($355.76 million).
In response to these challenges, MTN Nigeria has initiated several measures to restore profitability, including renegotiating tower leases and implementing a tariff increase approved in January. Group CEO Ralph Mupita expressed cautious optimism, stating, “That pain which we’ve had for 18 months, is abating somewhat … the business is growing very strongly. So I’m actually very bullish and confident that we’ll see strong recovery in Nigeria.”
The situation in Sudan has further complicated MTN’s operational and financial performance, as ongoing armed conflict has led to impairments totaling 11.7 billion rand ($643.40 million). Mupita noted progress, stating that MTN has “started to see sites coming back on air” in areas previously affected by conflict, including Khartoum, where network disruptions had persisted since April 2023.
Despite these challenges, MTN Group, which serves 291 million customers across 16 African markets, recorded a 15% decline in group service revenue to 177.8 billion rand. However, on a constant currency basis, service revenue increased by 14%. In South Africa, service revenue grew by 3.1%, benefiting from data, fintech, digital, and enterprise sectors. The group also declared a final dividend of 345 cents per share, projecting a minimum dividend of 370 cents in the upcoming financial year ending December 2025.
In summary, MTN Group faced significant financial challenges due to the devaluation of the Nigerian naira and operational difficulties in Sudan. The company’s earnings fell sharply, prompting strategic measures to restore profit and navigate the adverse economic conditions. Although challenges remain, there is a sense of optimism for recovery in Nigeria and steady growth in other markets, particularly in South Africa, highlighting MTN’s resilience and capacity for adaptation.
Original Source: telecom.economictimes.indiatimes.com
