MTN Group is going through an exceptionally difficult patch, and has there hinted that it expects to report a massive half-year loss when it publishes its interim financial results to June later this month.
The warning – of a headline loss of as much as US$0.15/share – is mainly the result of ongoing troubles in Nigeria, where the collapsing naira is strangling the company, despite a reasonable underlying performance.
The losses come despite improvements in some key markets, including Ghana and Uganda. South Africa, too, is expected to make “encouraging progress in key areas of the business”.
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Interim Group headline earnings per share (Heps) is expected to be negatively impacted to the tune of US$0.34 by a range of non-operational items, including:
- Foreign exchange losses of US$0.28 (2023: about US$0.10), which include a naira depreciation impact of -US$0.21 (2023: about US$0.07);
- Hyperinflation adjustments of -US$0.031 (2023: US$0.021);
- Deferred tax charge/asset reversal of -US$0.015 (2023: nil); and
- Other non-operational items of -US$0.014 (2023: nil).
“The group anticipates reporting a resilient underlying performance, with pleasing momentum in some key markets,” MTN said in a trading update published after the market closed in Johannesburg on Wednesday.
In the same update, MTN said its Nigerian operation has concluded the renegotiation of tower lease agreements with IHS Towers and American Tower Corporation.
“The revised terms meaningfully reduce the US dollar-indexed component of the leases linked to a discounted US consumer price inflation rate, making the leases majority naira-linked, as well as set a cap for the naira CPI escalator component. They also remove technology-based pricing, allowing payments for new upgrades based on tower space and power,” MTN said.
The group also announced that it has sold its subsidiary in Guinea-Bissau, a small market in West Africa. It was bought by Telecel Group. Terms were not disclosed
