MTN Group reported a 69% drop in annual earnings due to Nigerian naira devaluation and severe challenges in Sudan. Headline earnings per share fell to 98 cents, with a pretax loss in Nigeria increasing over 200%. The company’s service revenue decreased by 15%, although it rose 14% in constant currency. A final dividend of 345 cents was declared, up from 330 cents.
MTN Group, Africa’s premier telecommunications operator, has reported a striking 69% decrease in its annual earnings, primarily due to the devaluation of the Nigerian naira and significant operational challenges in Sudan. The South African-based company stated that its headline earnings per share (HEPS) plummeted to 98 cents for the fiscal year ending December 31, a considerable drop from 315 cents in the previous year.
The recent devaluation of the naira arises from chronic dollar shortages in Nigeria, prompting the government to implement currency stabilization measures aimed at attracting foreign investment. Concurrently, escalating inflation and high interest rates have led to increased operational costs, exacerbating MTN Nigeria’s pretax losses, which soared over 200% to ₦550.3 billion (approximately $355.76 million).
The ongoing armed conflict in Sudan has further hindered MTN’s operational and financial performance, as highlighted by Group CEO Ralph Mupita in a recent statement. Despite these adversities, MTN Group, which serves 291 million customers across 16 African markets, reported a 15% decline in overall service revenue, totaling R177.8 billion ($9.78 billion). However, in constant currency terms, group service revenue actually increased by 14%.
Additionally, the group announced a final dividend of 345 cents per share, slightly higher than the 330 cents declared in the previous reporting period, reflecting the company’s resilience despite the challenging economic landscape.
In summary, MTN Group has faced significant financial challenges due to the devaluation of the Nigerian naira, compounded by high inflation and operational difficulties in Sudan. The drastic fall in earnings and service revenue underscores the impact of economic instability on telecommunications operations in the region. Nonetheless, the company has managed to maintain a stable dividend payout to its shareholders, indicating its ongoing commitment to investor returns despite market adversities.
Original Source: www.zawya.com
