MTN Group reported a 69% drop in annual earnings due to the devaluation of the Nigerian naira and struggles in Sudan. The company anticipates recovery through various initiatives, including tariff hikes and operational improvements, despite a noticeable decline in group revenues. In South Africa, service revenue showed resilience, leading to a declaration of dividends for shareholders.
MTN Group, Africa’s largest telecommunications operator, reported a significant 69% decline in its annual earnings, attributed to the devaluation of the Nigerian naira and operational difficulties in Sudan. The South Africa-based company disclosed that its headline earnings per share decreased from 315 cents in 2023 to 98 cents for the year ending December 31.
The devaluation follows Nigeria’s ongoing dollar shortages, prompting government measures to stabilize the naira and attract foreign investments. Amid high inflation and increased interest rates, the cost burden led to a more than 200% increase in MTN Nigeria’s pre-tax loss, reaching 550.3 billion naira ($355.76 million).
In response, MTN Nigeria is implementing several strategies to restore profitability. Initiatives like renegotiating tower leases and a recent tariff increase, approved in January, are part of the company’s approach to addressing its asset-liability imbalance. Group CEO Ralph Mupita expressed optimism about future growth, 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.”
In Sudan, MTN faced operational hurdles amid ongoing conflict, leading to impairments totaling 11.7 billion rand ($643.40 million). Mupita noted some restoration in service, with sites in conflict areas, including the capital Khartoum, beginning to come back online.
Furthermore, MTN Group reported a 15% decrease in group service revenue, totaling 177.8 billion rand, although revenue increased by 14% in constant currency terms. In South Africa, service revenue was buoyed by data, fintech, digital, and enterprise services, marking a 3.1% increase. A final dividend of 345 cents per share was declared, with an expectation of a minimum dividend of 370 cents for the financial year ending December 2025.
The financial report from MTN Group highlights the significant impact of the Nigerian naira devaluation and operational challenges in Sudan on its earnings. Although facing considerable losses, MTN’s strategic initiatives and evolving conditions in Nigeria suggest potential for recovery. Despite these obstacles, the company remains committed to improving its performance and dividend returns in the upcoming financial year.
Original Source: telecom.economictimes.indiatimes.com
