• Tuesday, April 16, 2024
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BusinessDay

Headline earnings at MTN group to slump 60-80% on naira devaluation

Economic Week Ahead: MTN conference call, FGN savings bond go live

MTN expects to report a 60%-80% fall in headline earnings per share (HEPS) for the year to end-December, weighed down by non-operational issues and a sharp devaluation in the naira.


Africa’s largest mobile operator expected to report HEPS of 231c-462c from 1,154c a year ago, it said on Friday.

MTN expects to report a “resilient underlying operational performance for [the 2023 financial year] in a challenging operating environment”. 


“The financial result has, however, been negatively affected by the sharp devaluation in the naira against the US dollar impacting MTN Nigeria’s financials, despite the operating company’s solid underlying operational performance,” it said.


This mainly drove higher operating and net finance costs for MTN Nigeria, which are expected to affect the group’s full-year financial performance. The foreign exchange losses in MTN Nigeria’s financial results are estimated to be 593c in the group full-year results.



The company’s HEPS were negatively affected by non-operational items of about 889c, including hyperinflation adjustments of 151c and foreign exchange losses of 715c, which includes naira depreciation.

MTN expects to declare a dividend in line with guidance of a minimum final dividend of 330c per share for its 2023 financial year.



The naira’s devaluation has wiped out billions of rand in the group’s earnings and cash flow, while its tower partner is working to isolate it from other shareholders over governance concerns.

MTN has had a tumultuous relationship with its largest operation for years, exemplified by an infamous $5.2bn tax matter in 2015. MTN is the largest mobile provider in Nigeria, with 77.6-million customers by September 2023.

The Nigerian operations comprise a third of the group’s earnings.

The group’s business in Ghana managed to grow revenue by a third in the full year to end-December, even as an economic downturn weighed on consumers and regulations dragged down subscriber numbers.

 
MTN Ghana on Thursday reported that higher utility costs and a 38.5% depreciation of the Ghanaian cedi against the dollar contributed to the challenges. Against this backdrop, MTN’s third-largest operation managed to grow service revenue by 34.6% to 13.3-billion cedis.

Profit after tax jumped 39.4% to just less than 4-billion cedis, driven mainly by growth in voice, mobile data and fintech services.