For its half-year results, MTN Group has issued a warning predicting a 140% to 150% decline in headline profits per share (HEPS) and a 175% to 180% loss in earnings per share (EPS).
The declining value of the Nigerian naira and the ongoing turmoil in Sudan are blamed for the decrease.
The corporation attributes a significant portion of its H1 2024 financial performance to adverse currency translation effects (rand), which are anticipated to have negative effects on all three subsidiaries: South Sudan, Ghana, and Nigeria.
Read also: MTN Nigeria renegotiate agreements with IHS, INT
MTN Group, which has over 288 million subscribers in 18 African countries, expects its headline earnings per share and earnings per share (EPS) to decline in the six months ending June 30, 2024. This comes after a 2023 increase of 13%. On August 19, 2024, the telco will make available its half-year report.
Other factors responsible for MTN’s decline earnings
The following factors were also identified as the cause of the negatively impacted HEPs and EPs:
Adjustments for hyperinflation; foreign exchange losses; delay in taxation or reversal of assets; impairment losses mostly about property, plant, equipment, and goodwill; deterioration upon recalculating disposal group measurements and other non-operational items.
Strong cash flow in important markets supports MTN Group’s confidence in its underlying performance, even with the expected drop.
MTN Ghana, Uganda and South Africa remarkable performance
The company is very enthusiastic about MTN Ghana and MTN Uganda, which demonstrated remarkable performance in H1 2024, as well as MTN South Africa’s robust sector presence. These elements support the company’s optimistic forecast for significant advancement.
MTN Nigeria’s 52.8% reduction in Q1 service revenue contributed R10.2 billion ($553.7 million) to the 18.8% decline in service revenue that MTN Group recorded.
After releasing its half-year report, the firm sold its West African subsidiary, MTN Guinea-Bissau. This subsidiary had financial problems after missing payments on a loan of R171 million ($9.3 million). However, the company is now concentrating on strategic goals.
MTN Nigeria and IHS Towers renegotiated the leasing deal for the tower master, extending the terms for 12,500 tenancy leases until December 2032. The company stressed that the renegotiated terms aim to address the company’s negative equity position, assist margin recovery, and limit macro risks.
Read also: MTN sell Guinea-Bissau subsidiary to Telecel
MTN Nigeria report a rise in data revenue
Due to increased user and data usage, MTN Nigeria has reported a 54.7% rise in data revenue for the first half of 2024.
This information was included in the company’s recently reported financial results for the period ending June 2024.
Strong demand for data services and service quality improvements contributed to the growth of data income.
The telecom operator disclosed that, in Q4 2023, it also introduced pricing optimization for a few of its data bundle products, which helped to explain the spike in data income.
The company’s 4G network population coverage reached 82%, up 0.5 per cent from December 2023, reflecting the growth of its user base.
Additionally, 5G coverage rose from 1.5% to 12.7%.
“We are happy with the robust commercial momentum in our platforms and connectivity business, bolstered by the expanding user base, which has allowed us to generate 32.6% growth in service revenue.
“This growth was bolstered by some favourable base effects (particularly in Q1) but demonstrated the tenacity of demand for our digital, voice, fintech, and data services, all of which delivered double-digit growth.” ” the study stated.
Additionally, the percentage of people using smartphones increased to 55.9%, up 2.9% from the previous year. This led to a significant increase in data usage of 30.5% to 10.6 GB per user.
The survey also showed an equally impressive increase in data traffic, 42.6%.