MTN Group Profit to Plunge by 90% Amid Naira Devaluation

MTN Group, led by CEO Ralph Mupita, predicts a significant drop in profits. Specifically, the company expects a potential decrease of up to 90% for the fiscal year 2023.

Expectedly, this alarming news thrusts the telecom giant into the spotlight as it has triggered widespread concern and debate among investors and industry observers.

The dismal forecast primarily stems from a major financial setback in MTN Nigeria. Notably, this subsidiary is the conglomerate’s most lucrative arm.

recall that they reported losses surpassing $80 million at the close of its fiscal year 2023. The devaluation of Nigeria’s currency, the naira, stands as the primary cause of this downturn.

Furthermore, Karl Toriola, the Nigerian business executive at the helm of MTN Nigeria, identified the devaluation as the key driver of these challenges.

Mupita’s Leadership and Challenges

Despite these challenges, MTN Group under Ralph Mupita has solidified its position as Africa’s leading telecom service provider.

Particularly, the company boasts a customer base exceeding 292 million across 19 markets. Mupita’s strategic vision and execution have contributed to the expansion of MTN Group.

Meanwhile, he has earned recognition as one of Southern Africa’s most influential CEOs. His minority stake in MTN is currently valued at $3.5 million.

Naira Devaluation Impact

However, the telecom giant faces a challenging operating environment and is preparing for significant headwinds.

These challenges stem mainly from the significant devaluation of the Nigerian Naira against the US Dollar.

Despite this, MTN expects to report a resilient underlying operational performance for the fiscal year 2023.

Nonetheless, the sharp devaluation of the naira has negatively impacted the financial results. It has notably affected MTN Nigeria’s financial performance.

The devaluation has resulted in higher operating and net finance costs for MTN Nigeria. Consequently, this impacts the overall financial performance of the MTN Group for fiscal year 2023.

MTN projects a decline in earnings per share (EPS) to be between -90 percent and -70 percent. This prediction translates to a range of -R9.64 ($0.505) to -R7.5 ($0.393).

For context, this is compared to the reported EPS of R10.71 ($0.562) for the fiscal year ending Dec. 31, 2022.

In a similar vein, MTN expects a decrease in headline earnings per share (HEPS) within the range of -80 percent to -60 percent.

This decrease is equivalent to -R9.23 ($0.484) to -R6.92 ($0.362). To compare, the reported HEPS was R11.54 ($0.604) for fiscal year 2022.

Despite these challenges, the MTN Group board seeks to reassure investors. They have indicated their intention to declare a dividend in line with previous guidance.

They commit to a minimum ordinary final dividend of R3.3 ($0.173) per share for fiscal year 2023.