MTN Group experienced a 69% decline in annual earnings due to the Nigerian naira devaluation and operational issues in Sudan. The company is implementing initiatives to restore profitability in Nigeria and reported a service revenue decrease of 15% group-wide, although some segments showed growth. Despite challenges, CEO Ralph Mupita expressed optimism for recovery.
MTN Group reported a significant 69% decrease in full-year earnings, primarily due to the devaluation of the Nigerian naira and ongoing challenges in Sudan. The South Africa-based telecom operator indicated that its headline earnings per share (HEPS) plummeted from 315 cents in 2023 to 98 cents for the fiscal year ending December 31. These financial difficulties arise in the context of a chronic shortage of dollars in Nigeria, necessitating a currency devaluation by the authorities to stabilize the economy and foster investment.
Accompanied by soaring inflation and interest rates, the economic climate has adversely affected MTN Nigeria, leading the company to report a pre-tax loss exceeding 550.3 billion naira ($355.76 million), a staggering increase of over 200%. To combat these issues, MTN Nigeria is pursuing various initiatives aimed at restoring profitability, such as renegotiating tower leases and implementing a tariff hike approved in January.
Group CEO Ralph Mupita expressed cautious optimism despite the recent pain endured over the past 18 months, stating, “That pain which we’ve had for 18 months, is abating somewhat … the business is growing very strongly.” He emphasized his confidence in MTN Nigeria’s recovery prospects as operational improvements take shape.
In Sudan, armed conflict has severely affected MTN’s operational and financial stability, leading to impairments of 11.7 billion rand ($643.40 million). Mupita noted that the company has begun to see network restorations in previously affected areas, such as Khartoum, where services had been disrupted since April 2023.
MTN Group, serving 291 million customers across 16 African markets, recorded a 15% decrease in group service revenue, totaling 177.8 billion rand. However, when measured in constant currency, group service revenue experienced a 14% increase. In South Africa, service revenue increased by 3.1%, bolstered by growth in data, fintech, digital, and enterprise segments. Furthermore, the company declared a final dividend of 345 cents per share and anticipates a minimum dividend of 370 cents for the financial year ending December 2025.
In conclusion, MTN Group faces substantial financial challenges owing to currency devaluation in Nigeria and conflicts in Sudan. Despite a dramatic drop in annual earnings and increased operational losses, MTN is actively pursuing measures to restore profitability. The company remains hopeful for recovery, particularly in Nigeria, where strategic initiatives have been put in place. Overall, while the short-term outlook appears difficult, there are signs of potential stabilization and growth in the long term.
Original Source: telecom.economictimes.indiatimes.com
