MTN takes massive Nigeria hit

MTN expects its earnings to decrease by up to 90% as the company suffered severe foreign exchange losses from its Nigerian operations.

MTN informed shareholders this morning that it is currently in the process of finalising its results for the year ending 31 December 2023.

“The group anticipates reporting a resilient underlying operational performance for FY 23 in a challenging operating environment,” the company said.

“The financial result has, however, been negatively affected by the sharp devaluation in the naira against the US dollar, impacting MTN Nigeria’s financials, despite the operating company’s solid underlying operational performance.”

This mainly drove higher operating and net finance costs for MTN Nigeria, which are expected to impact the entire MTN group’s financial performance. 

The foreign exchange losses in MTN Nigeria’s financial are estimated to be 593 cents

 in the Group FY 23 results – a massive increase from 52 cents in 2022.

MTN expects the following changes to its earnings –

2022 (cents)Expected decrease (%)2023 (cents)
Earnings per share1,07170% to 90%107 to  321
Headline earnings per share1,15460% to 80%231 to 462

MTN’s earnings per share (EPS) for 2023 includes:

  • Impairment losses that mainly relate to investments, goodwill, property, plant and equipment and remeasurement of non-current assets held for sale totalling approximately 40 cents.
  • An impairment loss on remeasurement of disposal groups of 50 cents
  • A net gain on the disposal of SA towers of 3 cents (2022: 22 cents) and
  • The net loss on disposal of property, plant and equipment and intangible assets of -1 cents (2022: 9 cents).

MTN said its headline earnings per share were negatively impacted by some non-operational items of approximately 889 cents, up significantly from 159 cents in 2022. 

These include:

  • Hyperinflation adjustments of 151 cents (2022: 125 cents)
  • Foreign exchange losses of 715 cents (2022: 181 cents), which includes naira depreciation impact of 593 cents (2022: 52 cents)
  • Remeasurement of deferred tax asset of nil (2022: 65 cents)
  • Other non-operational items of 23 cents (2022: 14 cents)

MTN’s board anticipates declaring a dividend in line with guidance of a minimum ordinary final dividend of 330 cents per share for FY23.