MTN Group Reports Significant Profit Decline Due to Currency Challenges in Nigeria

MTN Group’s annual profit was negatively impacted by Nigeria’s naira devaluation and increased costs, leading to a HEPS drop to 98 cents. The company’s pretax loss in Nigeria exceeded ₦550 billion, compounded by inflation and Sudanese conflict issues. Group revenue decreased by 15%, yet, in constant currency, it rose by 14%. A final dividend was declared at 345 cents per share.

MTN Group, a telecommunications giant based in South Africa, reported a notable decline in its headline earnings per share (HEPS) for the year ending December 31, dropping to 98 cents from 315 cents in the previous year. The decline is attributed primarily to challenges faced in Nigeria, where persistent dollar shortages have compelled the government to devalue the naira to stabilize the economy and attract foreign investment.

The devaluation, in conjunction with soaring inflation and high interest rates, has significantly increased operational costs for MTN Nigeria, resulting in a pretax loss that surged over 200% to ₦550.3 billion (approximately $355.76 million). Additionally, the company faced operational challenges in Sudan, where ongoing armed conflict has adversely affected its performance, stated Group CEO Ralph Mupita.

Despite these challenges, MTN Group, which serves 291 million customers across 16 African markets, maintained its overall resilience, with a reported group service revenue decline of 15% to R177.8 billion (around $9.78 billion). However, when considering constant currency adjustments, service revenue actually increased by 14%. In light of its performance, the company declared a final dividend of 345 cents per share, an increase from the previous 330 cents.

MTN Group experienced significant financial setbacks due to currency devaluation in Nigeria and ongoing conflict in Sudan. Despite these issues, the company showed a resilient performance in certain areas, with a maintained dividend increase. Overall, the turbulent economic environment in key markets has posed considerable challenges to MTN’s operations and profitability, warranting ongoing strategic evaluations.

Original Source: www.bizcommunity.com