MTN Group reported a 69% drop in full-year earnings due to Nigerian naira devaluation and operational issues in Sudan. The group’s HEPS fell to 98 cents, while pre-tax losses in Nigeria exceeded 200%. Strategic initiatives are in place for recovery, and service revenue showed resilience in specific markets, despite an overall decline.
MTN Group, the largest telecom operator in Africa, experienced a significant 69% decline in its full-year earnings. This downturn was primarily attributed to the devaluation of the Nigerian naira and operational difficulties in Sudan. As reported, the group’s headline earnings per share (HEPS) dropped from 315 cents in 2023 to 98 cents for the year ending December 31.
Nigeria has faced persistent dollar shortages, prompting authorities to devalue the naira as part of measures aimed at stabilizing the currency and attracting foreign investment. Meanwhile, high inflation and interest rates have escalated costs, leading to MTN Nigeria’s pre-tax loss exceeding 200%, reaching 550.3 billion naira ($355.76 million).
To address these challenges, MTN Nigeria has initiated several strategies to restore profitability, including renegotiating tower leases and implementing a tariff increase approved in January. Group CEO Ralph Mupita expressed cautious optimism regarding recovery, stating, “That pain which we’ve had for 18 months, is abating somewhat… the business is growing very strongly.”
In Sudan, the group’s performance was adversely affected by ongoing armed conflicts, which led to impairments totaling 11.7 billion rand ($643.40 million). Mupita noted signs of recovery, with some sites in conflict areas, such as Khartoum, beginning to resume operations.
MTN Group reported a 15% decrease in service revenue, down to 177.8 billion rand, although revenue increased by 14% in constant currency. Additionally, the company recorded a 3.1% rise in service revenue within South Africa, bolstered by performance in data, fintech, digital, and enterprise sectors. The group declared a final dividend of 345 cents per share and anticipates a minimum dividend of 370 cents in the upcoming financial year ending December 2025.
In summary, MTN Group has faced significant challenges, primarily due to the devaluation of the Nigerian naira and operational issues in Sudan, leading to a substantial decrease in earnings. However, the company is implementing strategic measures to recover profitability in Nigeria and showing signs of eventual recovery in Sudan. Despite a decline in overall service revenue, MTN continues to anticipate future growth and maintain dividend payouts for its shareholders.
Original Source: telecom.economictimes.indiatimes.com
