MTN Group's annual profit slumps on Nigeria naira devaluation
TLDR
- MTN Group, Africa's largest telecom operator, saw a 72.3% profit decline due to sharp devaluation of the Nigerian naira impacting MTN Nigeria.
- Headline earnings per share for MTN dropped to 315 cents from 1,137 cents, with adjusted earnings per share down by 9.5%.
- The Nigerian naira devaluation, sparked by new forex regulations, hit a massive 96.7%, with the exchange rate hitting 907.1 naira per dollar.
MTN Group, Africa's largest telecommunications operator, reported a significant 72.3% decline in full-year profit on Monday, largely attributed to the sharp devaluation of the Nigerian naira, which resulted in its major subsidiary, MTN Nigeria, registering a loss.
The South Africa-based MTN disclosed that its headline earnings per share, a key profitability metric, plummeted to 315 cents for the year ending December 31, down from a restated 1,137 cents in the previous year. Adjusted headline earnings per share also experienced a decline of 9.5% to 1,203 cents.
The devaluation of the Nigerian naira was primarily triggered by new foreign exchange regulations implemented by Nigeria's central bank in June. MTN noted that this resulted in a staggering 96.7% devaluation, with the exchange rate reaching 907.1 naira per dollar by the end of December.
Key Takeaways
Nigeria’s currency crisis, which stems from a scarcity of dollars, has resulted in an exodus of international businesses that need to repatriate earnings from one of Africa’s biggest economies. The devaluation of the Nigerian naira, prompted by new forex regulations adopted by Nigeria's central bank in June, has seen the exchange rate depreciate significantly. Despite these challenges, MTN, serving 295 million customers across 19 African markets, declared a final dividend of 330 cents per share. The company also highlighted a 6.9% growth in group service revenue, which reached 210.1 billion rand ($11.09 billion).
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