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MTN Group is preparing investors for a disappointing earnings report, cautioning that its full-year 2024 headline earnings per share (HEPS) could decline by 59% to 79%. The situation is even worse for earnings per share, which are expected to drop by over 100% due to persistent foreign exchange losses. Strangely, despite this gloomy forecast, MTN’s stock reached a 52-week high yesterday morning before later stabilizing.
The primary issue? Currency devaluation, particularly in Nigeria. According to MTN, forex losses accounted for a $0.32 per share hit, with the naira alone responsible for $0.21. When factoring in hyperinflation adjustments, deferred tax expenses, and other non-operational costs, the total negative impact rises to -$0.38 per share. In essence, despite strong business performance, external economic pressures severely impacted the company’s financials.
MTN maintains that, despite poor earnings, its operational performance in 2024 remained strong. The company claims conditions improved in the latter half of the year as inflation and forex rates stabilized in key markets. As a result, they anticipate positive trends in H2 earnings, free cash flow, and leverage ratio.
MTN’s key markets—South Africa, Nigeria, Ghana, and Uganda—delivered solid performance, with MTN South Africa even experiencing increased profitability in the year’s second half. However, Nigeria remains a major hurdle, making the recent regulatory approval of tariff adjustments in January 2025 a welcome relief for the company.
MTN Nigeria has begun implementing the new tariffs, describing them as a crucial move to maintain the telecom sector’s sustainability amid economic challenges. However, the lasting impact of currency devaluation, particularly the naira’s sharp decline, continues to put significant pressure on its financial performance.
MTN’s full financial report is set for release on March 17, 2025, providing investors with a detailed breakdown. For now, though, it’s evident that while the company remains operationally strong, external economic pressures continue to take a heavy toll.
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