Details as MTN Group Faces a Steep Profit Decline Over Naira Devaluation

MTN Group, the largest telecommunications provider in Africa, has reported a significant decline in its annual profits, highlighting the challenges posed by the economic environment in one of its key markets.

On Monday, the telecom giant revealed a 72.3% drop in its full-year profit, primarily due to a substantial devaluation of the Nigerian naira, which significantly impacted MTN Nigeria, its largest operational unit.

The Johannesburg-based company disclosed that its headline earnings per share, a crucial profitability indicator, plummeted to 315 cents for the fiscal year concluding on December 31, a sharp fall from the restated figure of 1,137 cents from the previous year. This downturn is largely attributed to new forex regulations introduced by Nigeria’s central bank in June. These regulations have resulted in an almost total devaluation of the Nigerian naira, with the exchange rate collapsing to 907.1 naira per US dollar by year-end, a staggering 96.7% devaluation.

Despite these headwinds, MTN reported a modest decrease in adjusted headline earnings per share, which fell by 9.5% to 1,203 cents. However, it wasn’t all gloomy for the telecom behemoth. MTN, which boasts a customer base of 295 million across 19 African countries, announced a final dividend of 330 cents per share.

The company also saw its group service revenue increase by 6.9%, reaching 210.1 billion rand (approximately $11.09 billion), signaling growth amidst adversity.