MTN Group reported a 69% decline in annual profits, mainly due to the devaluation of the naira and difficulties in Sudan, with significant pre-tax losses. Plans for recovery include renegotiating leases and tariff hikes. Despite challenges, service revenue grew in South Africa, leading to a projected increase in dividends.
Telecom group MTN reported a significant decline in its annual profit, with a 69% drop in full-year earnings, largely attributed to the devaluation of the Nigerian naira and operational issues in Sudan. The South Africa-based operator highlighted that its headline earnings per share (HEPS) decreased to 98 cents for the year ending December 31, 2023, from 315 cents in the previous year.
The naira’s devaluation resulted from ongoing dollar shortages and was implemented by Nigerian authorities as part of broader strategies aimed at stabilizing the currency and attracting foreign investment. High inflation and interest rates further exacerbated the situation, leading to a staggering increase in MTN Nigeria’s pre-tax losses, which soared over 200% to 550.3 billion naira (approximately $355.76 million).
In response to these challenges, MTN Nigeria is pursuing initiatives to restore profitability, which include renegotiating tower leases and raising tariffs. Group CEO Ralph Mupita expressed optimism, 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.”
Simultaneously, operational setbacks in Sudan due to armed conflict have impacted the group’s financial performance, resulting in impairments totaling 11.7 billion rand (about $643.40 million). Mupita noted improvements, indicating “we’ve started to see sites coming back on air” in conflict-affected areas, particularly in Khartoum, where services were previously halted.
MTN Group serves 291 million customers across 16 African markets and reported a 15% decline in group service revenue to 177.8 billion rand. However, in constant currency, service revenue increased by 14%. The group’s South African operations experienced a modest uplift, with service revenue rising by 3.1%, driven by growth in data, fintech, digital, and enterprise sectors. Furthermore, MTN declared a final dividend of 345 cents per share and expects to increase this to a minimum of 370 cents in the upcoming financial year ending December 2025.
In summary, MTN Group has faced considerable challenges due to the Nigerian naira’s devaluation, resulting in a 69% reduction in annual earnings and a significant pre-tax loss in Nigeria. Although operational difficulties persist in Sudan, the company has initiated strategic measures aimed at recovery and profitability. Future outlooks appear cautiously optimistic, particularly in Nigeria, as evidenced by the planned minimum dividend increase for the next financial year.
Original Source: telecom.economictimes.indiatimes.com
