MTN Group’s annual profit plummeted by 69% due to the Nigerian naira devaluation and Sudan’s operational issues. Its HEPS fell to 98 cents, with pre-tax losses in Nigeria exceeding 550 billion naira. The company is taking steps to restore profitability while reporting slight revenue growth in South Africa. CEO Ralph Mupita remains optimistic about recovery in Nigeria.
MTN Group reported a 69% decline in full-year earnings, primarily due to the devaluation of the Nigerian naira and operational difficulties in Sudan. The South Africa-based telecom operator revealed that its headline earnings per share (HEPS) dropped from 315 cents in 2022 to 98 cents for the year ending December 31, 2023, exacerbated by Nigeria’s currency and economic issues.
Nigeria’s chronic dollar shortages prompted the government to devalue the naira as part of efforts to stabilize the currency and enhance investment opportunities. This devaluation, alongside soaring inflation and interest rates, increased MTN Nigeria’s pre-tax losses significantly, resulting in a loss of 550.3 billion naira ($355.76 million).
To address financial challenges, MTN Nigeria is pursuing initiatives such as renegotiating tower leases and implementing tariff hikes, which received approval in January. Group CEO Ralph Mupita expressed optimism about the situation, 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.”
MTN’s operations in Sudan faced severe impediments due to ongoing armed conflict, leading to financial impairments totaling 11.7 billion rand ($643.40 million). Mupita noted that services have begun to resume as sites are restored, particularly in conflict-affected areas like Khartoum.
Across 16 African markets, MTN Group serves 291 million customers, reporting a 15% decline in overall service revenue to 177.8 billion rand. However, when measured in constant currency, group service revenue increased by 14%. In South Africa, the service revenue saw a slight increase of 3.1%, driven by gains in data, fintech, digital, and enterprise segments. Additionally, MTN declared a final dividend of 345 cents per share and projects to pay a minimum of 370 cents in the upcoming financial year ending December 2025.
MTN Group faces significant challenges resulting from currency devaluation in Nigeria and unrest in Sudan, leading to substantial profit declines. The company’s proactive measures to enhance profitability through tariff adjustments and operational improvements in Nigeria are crucial. Despite these setbacks, there are signs of recovery, particularly in service revenue in South Africa, showcasing potential resilience in the broader business landscape.
Original Source: telecom.economictimes.indiatimes.com
