MTN Group’s earnings suffers as the Nigerian naira falls. The JSE-listed telecommunications company stated that Heps’ foreign exchange losses from its important Nigeria operation will range from 60% to 80%.
As a result, the MTN Group has issued a warning to shareholders stating that it anticipates an 80% decline in headline earnings per share (Heps) for the 2023 fiscal year.
MTN Group’s Earnings Suffers Just After the Free Fall of Nigerian Naira
Despite MTN’s statement that its fundamental operational performance for the year ending in December 2023 is anticipated to be “resilient,” the significant depreciation of the Nigerian naira will significantly impair the reported figures.
For MTN Nigeria, this primarily resulted in increased operating and net finance costs, which are anticipated to affect the group’s financial performance in FY23. According to MTN Nigeria’s financial results for the group FY23, the expected foreign exchange losses are 593c (2022: 52c).” MTN informed shareholders on Friday.
The Group claims that MTN Nigeria’s operations, including both operating and capital expenditures, are subject to foreign exchange volatility. This impact is mostly seen in greater operating and net finance expenses, as well as foreign exchange losses.
MTN Nigeria’s Result Were Significantly Impacted Negatively
The naira’s exchange rate had a significant negative influence on MTN Nigeria’s results, as the company reported a loss after taxes of $87 million (N137.0 billion) for the year that ended in December 2023, as opposed to a restated profit after taxes of $221 million (N348.7 billion) for 2022. MTN Nigeria released its full-year performance for the year that ended in December 2023 yesterday.
Out of the 19 markets in the MTN Group, MTN Nigeria is the most lucrative. According to the company, “this resulted in negative retained earnings and total equity at the end of December 2023 of $132 million (N208.0 billion) and $26 million (N40.8 billion), respectively.”
According to the “MTN Group trading statement for the full year ended 31 December 2023” that was released on the Johannesburg Stock Exchange this morning, the performance of the Nigerian operational company in the year is anticipated to have an impact on the Group’s financial results.
MTN informed Shareholders to Anticipate a Decline in Earnings Per Share
As a result, MTN informed shareholders that they may anticipate a decline in earnings per share (EPS) of between -70% and -90% (i.e., -750 cents to -964 cents). Furthermore, the headline earnings per share (HEPS) decline that MTN Group anticipates would be between -60% and -80% (or -692 cents to -923 cents).
Despite the negative impact of the currency, MTN Nigeria reported that its performance in a difficult operating environment was satisfactory, with user base growth across all of its platforms and connectivity operations.
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