{"id":786042,"date":"2024-08-07T18:27:00","date_gmt":"2024-08-07T16:27:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=786042"},"modified":"2024-08-07T18:27:09","modified_gmt":"2024-08-07T16:27:09","slug":"big-trouble-for-mtn","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/786042\/big-trouble-for-mtn\/","title":{"rendered":"Big trouble for MTN"},"content":{"rendered":"\n<p>MTN is expecting to report a significant loss in the first half of the current financial year, with the group anticipating a massive 150% reduction in headline earnings.<\/p>\n\n\n\n<p>In a trading statement published near to the close of trading on Wednesday (7 August), the group said that it expects to report a <strong>headline loss per share of between 271 and 217 cents<\/strong> (a drop of between 140% and 150% from H1 23) for the six months ending June 2024.<\/p>\n\n\n\n<p>This is a decline of between 759 and 813 cents per share.<\/p>\n\n\n\n<p>On an adjusted basis\u2014removing what the group calls &#8220;non-operational and once-off items&#8221; amounting to 629 cents per share\u2014the group says it will maintain profitability, but still see HEPS reduce by 45% to 52%.<\/p>\n\n\n\n<p>These &#8220;adjustments&#8221; include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Hyperinflation adjustments of -57&nbsp;cents (2023:&nbsp;-38&nbsp;cents);<\/li>\n\n\n\n<li>Foreign exchange losses of -519\u00a0cents (2023: -169 cents), which includes naira depreciation impact of -389\u00a0cents (2023: -123\u00a0cents);<\/li>\n\n\n\n<li>Deferred tax charge\/asset reversal of -28 cents (2023: nil); and<\/li>\n\n\n\n<li>Other non-operational items of -25&nbsp;cents (2023: nil).<\/li>\n<\/ul>\n\n\n\n<p>The main reason for the massive decline in HEPS is the negative impact of the devaluation in the naira against the US dollar, which impacted MTN Nigeria&#8217;s financials.<\/p>\n\n\n\n<p>This is despite the business posting &#8220;a strong underlying operational performance&#8221; in its H1 24 release, the group said.<\/p>\n\n\n\n<p>The other negative impacts are the translation impact on reporting currency (rands) arising from the devaluation of most local currencies, particularly the naira in MTN&#8217;s portfolio against the rand, as well as operational challenges in Sudan due to the ongoing conflict in the country.<\/p>\n\n\n\n<p>&#8220;The naira devaluation drove higher operating and net finance costs for MTN Nigeria, which are<br>expected to impact the Group H1 24 financial performance,&#8221; the group said.<\/p>\n\n\n\n<p>The factors contributing to the losses include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The naira devaluation on MTN Nigeria&#8217;s operating expenses, which are estimated to reduce the Group H1 24 results by <strong>90 cents<\/strong> (2023: 4 cents). <\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The foreign exchange losses in MTN Nigeria&#8217;s financial results, which are estimated to reduce Group H1 24 results by a further <strong>389 cents<\/strong> (2023: 123 cents).<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In terms of the foreign currency translations affecting reporting currency results, this includes impacts from certain subsidiaries, which are estimated to reduce H1 24 results by approximately <strong>310 cents<\/strong>;<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Losses amounting to &#8211;<strong>16 cents<\/strong> (2023: 19 cents profit) from MTN Sudan, where business operations were severely impacted by the ongoing conflict.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p>MTN said it was making progress in initiatives to mitigate the negative effects of the macro environment on the business.<\/p>\n\n\n\n<p>Accordingly, MTN expects to report:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A decrease in EPS of between -185% and -175% (or -945 cents and -894 cents). Considering the<br>reported EPS for H1 23 of 511 cents, this translates to a range of -434 cents to -383 cents for H1 24.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A decrease in HEPS of between -150% and -140% (or -813 cents to -759 cents). Considering the<br>reported HEPS of 542 cents for H1 23, this translates to a range of -271 cents to -217 cents for H1<br>24.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"table-responsive\"><table class=\"table\"><thead><tr><th>Share<\/th><th class=\"has-text-align-center\" data-align=\"center\">H1 23 <br>(R&#8217;cents)<\/th><th class=\"has-text-align-center\" data-align=\"center\">H1 24 Expected<br>(R&#8217;cents)<\/th><th class=\"has-text-align-center\" data-align=\"center\">Expected decrease<br>(%)<\/th><th class=\"has-text-align-center\" data-align=\"center\">Expected decrease<br>(R&#8217;cents)<\/th><\/tr><\/thead><tbody><tr><td>Earnings per share<\/td><td class=\"has-text-align-center\" data-align=\"center\">511<\/td><td class=\"has-text-align-center\" data-align=\"center\">(434) &#8211; (383)<\/td><td class=\"has-text-align-center\" data-align=\"center\">(185%) &#8211; (175%)<\/td><td class=\"has-text-align-center\" data-align=\"center\">(945) &#8211; (894)<\/td><\/tr><tr><td>Headline earnings per share<\/td><td class=\"has-text-align-center\" data-align=\"center\">542<\/td><td class=\"has-text-align-center\" data-align=\"center\">(271) &#8211; (217)<\/td><td class=\"has-text-align-center\" data-align=\"center\">(150%) &#8211; (140%)<\/td><td class=\"has-text-align-center\" data-align=\"center\">(813) &#8211; (759)<\/td><\/tr><tr><td>Adjusted HEPS*<\/td><td class=\"has-text-align-center\" data-align=\"center\">749<\/td><td class=\"has-text-align-center\" data-align=\"center\">358 &#8211; 412<\/td><td class=\"has-text-align-center\" data-align=\"center\">(52%) &#8211; (45%)<\/td><td class=\"has-text-align-center\" data-align=\"center\">(391) &#8211; (337)<\/td><\/tr><\/tbody><\/table><\/div><figcaption class=\"wp-element-caption\"><em>* Adjusts for non-operational and once-off items of -629cps<\/em><\/figcaption><\/figure>\n\n\n\n<p>MTN said it is currently finalising its results for the period.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/mobile\/781763\/the-best-mobile-network-in-south-africa-mtn-vs-vodacom-vs-telkom-vs-cell-c-vs-rain\/\">The best mobile network in South Africa: MTN vs Vodacom vs Telkom vs Cell C vs Rain<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>MTN says it expects to report a massive headline loss per share in its mid-year results, thanks to troubles in Nigeria and Sudan.<\/p>\n","protected":false},"author":10,"featured_media":666907,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-786042","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/786042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=786042"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/786042\/revisions"}],"predecessor-version":[{"id":786044,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/786042\/revisions\/786044"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/666907"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=786042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=786042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=786042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}