MTN Group Reports 69% Decline in Annual Profit Due to Economic Challenges

MTN Group’s annual profit dropped by 69% due to the Nigerian naira’s devaluation and conflict in Sudan, with headline earnings per share falling to 98 cents. The company’s service revenue decreased by 15% despite a 14% rise in constant currency. It has declared a final dividend of 345 cents per share.

MTN Group, Africa’s foremost telecommunications operator, experienced a significant decline in full-year earnings, reporting a staggering 69% decrease primarily due to the devaluation of the Nigerian naira and operational disruptions in Sudan. The company’s headline earnings per share (HEPS) plummeted to 98 cents for the year ending December 31, down from 315 cents in the preceding year.

The devaluation of the naira has been exacerbated by chronic dollar shortages in Nigeria, prompting the government to take measures to stabilize the currency and stimulate investment. This, alongside soaring inflation and interest rates, has considerably increased operational costs, resulting in MTN Nigeria’s pretax loss surging over 200% to ₦550.3 billion (approximately $355.76 million).

In Sudan, ongoing armed conflict has hindered both operational and financial performance, noted by Group CEO Ralph Mupita in an official statement. Despite these challenges, MTN Group, with an extensive customer base of 291 million across 16 African markets, reported a group service revenue decline of 15%, totaling R177.8 billion (about $9.78 billion). When measured in constant currency, service revenue impressively rose by 14%.

In light of these results, MTN Group has declared a final dividend of 345 cents per share, a slight increase from 330 cents the prior year. This decision reflects ongoing confidence in its ability to navigate a challenging economic landscape despite the substantial earnings drop.

In summary, MTN Group’s annual profits have been severely impacted by factors such as the devaluation of the naira in Nigeria and conflict-driven operational challenges in Sudan. Despite a remarkable revenue rise in constant currency, the overall financial performance has suffered, leading to a 69% earnings decline. Nonetheless, the company continues to show a commitment to shareholder returns with a slight dividend increase.

Original Source: www.zawya.com