MTN takes a huge hit

MTN is facing serious financial strain, with the group expecting its earnings to drop into a loss for the 2024 financial year.

The group is in the process of finalising its results for the year ended 31 December 2024, as it struggles with the challenges posed by the operating environment.

However, it said the relative stability of some important key macroeconomic indicators, including inflation and foreign exchange rates in key markets, in the second half of FY24 was encouraging.

These factors supported its performance during the period, and the group expects to see positive momentum in H2 earnings, free cash flow, and holding company leverage ratio.

The groups’ results have recently taken serious strain, having been severely impacted by the devaluation of the naira in its biggest market Nigeria.

The group expects an improvement in the profitability trajectory of MTN South Africa’s larger operations and strong operational performance in Nigeria, Ghana, and Uganda.

It added that regulators in Nigeria’s approval of tariff adjustments in January 2025 was a huge milestone in ensuring the long-term sustainability of its business in the country.

MTN Nigeria has now started to implement the tariff adjustments, which the group said marks an important step towards addressing the impacts of the prevailing economic challenges.

Nevertheless, the group’s financial results remain affected by several external factors, such as local currency devaluation, especially the naira.

This included translation effects and forex losses in its financials, while the ongoing conflict in Sudan also impacted the group’s results.

Thus, MTN expects a decrease in earnings per share (EPS) of more than 100%, meaning that EPS will drop into a loss of between 554 cents to 509 cents for FY24.

A decrease in headline earnings per share (HEPS) of between -79% and -59% is also expected, translating to a range of 66 cents to 129 cents for FY 24.

The group said that differences in EPS and HEPS from the prior period are due to the following:

• Impairment losses that mainly relate to investments, goodwill, property, plant and equipment primarily related to Sudan totalling approximately -578 cents (2023: -40 cents);
• An impairment loss on remeasurement of disposal groups of approximately -8 cents (2023: -50 cents);
• A net loss on the disposal of investments in joint ventures and/or associate and/or subsidiaries of approximately -36 cents (2023: nil); and
• The net loss on disposal of property, plant and equipment and intangible assets of approximately -7 cents (2023: -1 cent loss).”

The group added that HEPS was negatively impacted by some non-operational items of roughly -718 cents (2023: -888 cents) for FY 24, including:

• Hyperinflation adjustments of approximately -16 cents (2023: -150 cents);
• Foreign exchange losses of approximately -598 cents (2023: -715 cents), which includes the naira depreciation impact of approximately -399 cents (2023: -593 cents);
• A deferred tax charge of approximately -58 cents (2023: nil); and
• Other non-operational items of approximately -46 cents (2023: -23 cents).

The group financial results for 2024 will officially be released on 17 March 2025.