MTN is anticipating a significant decline in headline earnings per share (HEPS) for the year ending December, ranging between 60% and 80%. This decrease is attributed to non-operational issues and a notable devaluation of the naira.
The company projects HEPS to be in the range of 231c to 462c, down from 1,154c reported a year ago. Despite these challenges, MTN remains optimistic about its underlying operational performance for the 2023 financial year, highlighting “resilience in the face of 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 declared.
The higher operating and net finance costs for MTN Nigeria primarily contributed to the group’s anticipated full-year financial performance impact.
Foreign exchange losses in MTN Nigeria’s financial results are projected to amount to 593c in the group’s overall full-year results.
Additionally, non-operational items, including hyperinflation adjustments and foreign exchange losses (including naira depreciation), adversely affected the company’s headline earnings per share (HEPS) by approximately 889c.
Despite these challenges, MTN intends to declare a dividend consistent with guidance, with a minimum final dividend of 330c per share for its 2023 financial year.
The devaluation of the naira has significantly impacted the group’s earnings and cash flow, resulting in substantial losses for MTN.
Additionally, its tower partner is taking steps to distance itself from other shareholders due to governance concerns.
MTN has faced ongoing challenges in its largest operation, particularly highlighted by a $5.2 billion tax dispute in 2015.
Strength in reserve
Despite these challenges, MTN remains the largest mobile provider in Nigeria, boasting 77.6 million customers as of September 2023, with Nigerian operations contributing a third of the group’s earnings.
In contrast, MTN’s business in Ghana experienced growth, with revenue increasing by a third in the full year to end December.
This growth occurred despite economic challenges affecting consumers and regulatory factors impacting subscriber numbers.
Higher utility costs and a 38.5% depreciation of the Ghanaian cedi against the dollar were among the challenges faced by MTN Ghana.
Nonetheless, the company’s third-largest operation managed to achieve 34.6% growth in service revenue, reaching 13.3 billion cedis.
Profit after tax also saw a significant increase of 39.4% to just under 4 billion cedis, primarily driven by growth in voice, mobile data, and fintech services.