{"id":814423,"date":"2025-02-27T09:56:01","date_gmt":"2025-02-27T07:56:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=814423"},"modified":"2025-02-27T09:56:06","modified_gmt":"2025-02-27T07:56:06","slug":"mtn-takes-a-huge-hit","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/814423\/mtn-takes-a-huge-hit\/","title":{"rendered":"MTN takes a huge hit"},"content":{"rendered":"\n<p>MTN is facing serious financial strain, with the group expecting its earnings to drop into a loss for the 2024 financial year. <\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>The groups&#8217; results have recently taken serious strain, having been severely impacted by the devaluation of the naira in its biggest market Nigeria.<\/p>\n\n\n\n<p>The group expects an improvement in the profitability trajectory of MTN South Africa&#8217;s larger operations and strong operational performance in Nigeria, Ghana, and Uganda.<\/p>\n\n\n\n<p>It added that regulators in Nigeria&#8217;s approval of tariff adjustments in January 2025 was a huge milestone in ensuring the long-term sustainability of its business in the country.<\/p>\n\n\n\n<p>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. <\/p>\n\n\n\n<p>Nevertheless, the group&#8217;s financial results remain affected by several external factors, such as local currency devaluation, especially the naira.<\/p>\n\n\n\n<p>This included translation effects and forex losses in its financials, while the ongoing conflict in Sudan also impacted the group&#8217;s results.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>The group said that differences in EPS and HEPS from the prior period are due to the following: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Impairment losses that mainly relate to investments, goodwill, property, plant and equipment primarily related to Sudan totalling approximately -578 cents (2023: -40 cents);<\/li>\n\n\n\n<li>An impairment loss on remeasurement of disposal groups of approximately -8 cents (2023: -50 cents);<\/li>\n\n\n\n<li>A net loss on the disposal of investments in joint ventures and\/or associate and\/or subsidiaries of approximately -36 cents (2023: nil); and<\/li>\n\n\n\n<li>The net loss on disposal of property, plant and equipment and intangible assets of approximately -7 cents (2023: -1 cent loss).&#8221;<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"table-responsive\"><table class=\"table\"><tbody><tr><td><strong>Financials<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>2023<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>2024<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>% Change<\/strong><\/td><\/tr><tr><td>EPS<\/td><td class=\"has-text-align-center\" data-align=\"center\">227<\/td><td class=\"has-text-align-center\" data-align=\"center\">(554) &#8211; (509)<\/td><td class=\"has-text-align-center\" data-align=\"center\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\">(100)%<\/mark><\/td><\/tr><tr><td>HEPS<\/td><td class=\"has-text-align-center\" data-align=\"center\">315<\/td><td class=\"has-text-align-center\" data-align=\"center\">66 &#8211; 129<\/td><td class=\"has-text-align-center\" data-align=\"center\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\">(79) &#8211; (59)%<\/mark><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/02\/Header-MTN-Business-Feb-e1740641517722.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"577\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/02\/Header-MTN-Business-Feb-e1740641517722-1024x577.jpg\" alt=\"\" class=\"wp-image-666907\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/02\/Header-MTN-Business-Feb-e1740641517722-1024x577.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/02\/Header-MTN-Business-Feb-e1740641517722-300x169.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/02\/Header-MTN-Business-Feb-e1740641517722-768x433.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/02\/Header-MTN-Business-Feb-e1740641517722.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure><\/div>\n\n\n<p>The group added that HEPS was negatively impacted by some non-operational items of roughly -718 cents (2023: -888 cents) for FY 24, including: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Hyperinflation adjustments of approximately -16 cents (2023: -150 cents);<\/li>\n\n\n\n<li>Foreign exchange losses of approximately -598 cents (2023: -715 cents), which includes the naira depreciation impact of approximately -399 cents (2023: -593 cents);<\/li>\n\n\n\n<li>A deferred tax charge of approximately -58 cents (2023: nil); and<\/li>\n\n\n\n<li>Other non-operational items of approximately -46 cents (2023: -23 cents).<\/li>\n<\/ul>\n\n\n\n<p>The group financial results for 2024 will officially be released on 17 March 2025. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>MTN is expecting a massive drop in earnings amidst severe challenges in West and Central Africa. <\/p>\n","protected":false},"author":95,"featured_media":770060,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[28],"class_list":["post-814423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-mtn"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/814423","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=814423"}],"version-history":[{"count":10,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/814423\/revisions"}],"predecessor-version":[{"id":814455,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/814423\/revisions\/814455"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/770060"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=814423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=814423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=814423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}