MTN to report 59% decline in 2024 full year earnings, blames forex losses and naira depreciation

Telecoms giant, MTN Group is set to report a significant decline in its full-year headline earnings per share (HEPS) when it publishes its annual report next month. The mobile operator affixed the drop to deteriorating foreign exchange impacts on its profit amidst a good operational performance.

MTN noted that its HEPS for the year ending December 31, 2024, will decline by 59 per cent to 79 per cent while earnings per share will rise by more than 100 per cent. As of January 26, MTN share price trades for N264.20 on the Nigerian Stock Exchange (NGX).

In the wake of its expected weak earnings announcement, MTN noted that it will report a strong underlying performance for the 2024 financial year when it publishes its full-year numbers next month.

“We are encouraged by the relative stability of some important key macroeconomic indicators in the second half of 2024, such as inflation and forex rates in some of our key markets. This provided some support to our performance in the period, and we anticipate reporting a pleasing positive momentum in H2 earnings, free cash flow, and holding company leverage ratio,” the group said.

The telecom company added that in its larger operations, it is expected to report an improvement in the trajectory of MTN Nigeria’s profitability, particularly in the second half of the year.

The group added that it will also have strong operational performances in MTN South Africa, MTN Ghana, and MTN Uganda.

Providing more updates on its HEPS, the group expressed that the financial measure was negatively impacted by non-operational items of some -$o.39/share, including hyperinflation adjustments. Others include forex losses of -$0.32, Nigerian naira depreciation impact of -$0.22, deferred tax charge, and other non-operational items. 

MTN Group will publish its annual results on 17 March 2025.

MTN’s positive outlook

On the bank of its projected decline in Heps, the group expressed the January 2025 approval of tariff adjustments by the Nigerian Communications Commission (NCC) as a significant milestone in ensuring the long-term sustainability of its business and the telecoms industry in the country.

Recall that the communication regulator in late January approved a 50 per cent telecom tariff hike after months of debates between the Nigerian government and stakeholders in the telecom industry. 

This saw MTN Nigeria introduce a 200 per cent increase across voice and data calls. However, the company claimed to have reversed the hike which has been plagued by doubts.  

“MTN Nigeria has started to implement the tariff adjustments, which represent an important step towards addressing the impacts of the prevailing economic challenges on the operation,” the group confirmed.

The group also noted that its financial results remained affected by several external factors including the negative impact of local currency devaluation in FY24, particularly the naira, against the US dollar on its results. This included both translation effects and forex losses in its financials.

The naira depreciation and economic decline seem to cut across boards following a similar negative report by another telecom operator, Airtel Nigeria.

Technext reported last week that the second-largest operator in the country saw its mobile services revenue decline to $738 million for the year ending December 31, 2024, which is a 40.34 per cent decrease from the $1.2 billion recorded in the previous year. 

The report noted that Airtel Nigeria’s mobile service saw voice revenue slip by 46.34 per cent to $315 million and data revenue drop to $344 million in December 2024. This represents a 36.28 per cent shift from the $539 million recorded in December 2023.  

The financial statement comes even as Airtel Nigeria adjusted its voice and data pricing model by up to 50%. It increased voice call tariffs over the weekend where the SMS charge is now N6, up from N4. The new Airtel price, which affects various data bundles, is a response to ongoing industry concerns over the impact of inflation, forex volatility, and escalating operational costs. 

Reacting to the tariff hike, the company said it will leverage it to bounce back and scale up its revenue while maintaining investment plans in network upgrades. 

“The price increase, which was highly needed for the survival and continued growth of the industry, will enable us to continue investing in network infrastructure, expanding coverage, and delivering improved products and services that meet the evolving needs of our customers,” Airtel Nigeria’s Chief Executive Officer, Dinesh Balsingh, said. 

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