MTN Group reported a 69% drop in profit due to Nigeria’s naira devaluation and issues in Sudan. Headline earnings per share fell from 315c to 98c. The company experienced a significant rise in operational costs from currency instability, resulting in a pretax loss of ₦550.3 billion. Nonetheless, group service revenue decreased only in nominal terms, and a small dividend increase was announced.
MTN Group, Africa’s largest telecom operator, reported a 69% decrease in its full-year earnings, primarily due to the devaluation of the Nigerian naira and operational difficulties in Sudan. The company revealed that its headline earnings per share (HEPS) fell significantly from 315 cents in 2022 to 98 cents for the year ending December 31, 2023.
The Nigerian economy continues to face issues such as dollar shortages leading to the naira’s devaluation. This decision was part of governmental efforts to stabilize the currency and promote foreign investments. Consequently, inflation and high interest rates have steepened operational costs, resulting in a more than 200% increase in MTN Nigeria’s pretax loss, which amounted to ₦550.3 billion (approximately $355.76 million).
In Sudan, MTN’s performance has been adversely affected by persistent armed conflicts, limiting both operational and financial growth. CEO Ralph Mupita mentioned these challenges in a recent statement, highlighting the unique issues faced in the region.
Overall, MTN Group, with a customer base of 291 million across 16 African markets, reported a 15% decrease in group service revenue, totaling R177.8 billion ($9.78 billion). However, in constant currency terms, the revenue actually grew by 14%. The company announced a final dividend of 345 cents per share, which is slightly higher than last year’s dividend of 330 cents.
In summary, MTN Group’s significant profit decline is attributed to currency devaluation in Nigeria and ongoing conflicts in Sudan. While service revenue showed improvement in constant currency, external economic pressures have led to substantial operational losses. Despite the challenges, the declaration of a slightly increased dividend reflects confidence in long-term recovery and growth.
Original Source: www.zawya.com
