MTN Group’s profits have declined sharply, with HEPS dropping to 98 cents from 315 cents in the previous year, primarily due to Nigeria’s currency devaluation and high inflation. The company’s pretax loss in Nigeria exceeded ₦550 billion. Despite a 15% drop in group service revenue, MTN announced a dividend increase to 345 cents per share. CEO Ralph Mupita noted ongoing issues in Sudan as additional challenges.
MTN Group, headquartered in South Africa, reported a significant decline in its headline earnings per share (HEPS), which fell to 98 cents for the year ending December 31, down from 315 cents in 2022. This decline is attributed to the ongoing challenges faced in Nigeria, where the naira has been devalued due to a chronic shortage of U.S. dollars. The government’s actions to stabilize the currency and attract foreign investment have contributed to this situation.
The financial strain in Nigeria has been compounded by high inflation and rising interest rates, resulting in an over 200% increase in MTN Nigeria’s pretax loss, which reached ₦550.3 billion (approximately $355.76 million). Additionally, the operational challenges in Sudan due to armed conflict have further affected the company’s financial performance, as noted by Group CEO Ralph Mupita.
MTN Group serves 291 million customers across 16 African markets, experiencing a 15% decline in group service revenue, which totaled R177.8 billion ($9.78 billion). However, when adjusted for constant currency, the service revenue displayed a 14% increase. Despite these financial challenges, the company announced a slight increase in its final dividend, from 330 cents to 345 cents per share.
In summary, MTN Group has faced considerable financial difficulties due to Nigeria’s currency devaluation, high inflation, and conflicts in Sudan. The decline in headline earnings per share and significant pretax losses, particularly in Nigeria, reflect the challenging economic environment. Nevertheless, MTN has maintained a commitment to its shareholders by slightly increasing its dividend per share, showcasing resilience in the face of adversity.
Original Source: www.bizcommunity.com
