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MTN Group braces for sharp earnings decline amid forex losses

February 27, 2025

Africa’s largest mobile operator, MTN Group braces for sharp earnings decline amid forex losses, citing significant foreign exchange (forex) losses and economic instability in key markets.

The company projects a drop in headline earnings per share (HEPS) of between 59% and 79%, translating to 66 to 129 cents per share, a stark contrast to the 315 cents recorded in the previous year.

MTN Nigeria reported a ₦514.9 billion after-tax loss in Q3 2024, largely attributed to currency volatility and economic instability.

Forex losses, impairment charges, and asset disposals primarily drive the anticipated downturn. MTN’s largest market, Nigeria, has been particularly affected.

In the third quarter of 2024, MTN Nigeria reported an after-tax loss of ₦514.9 billion, largely due to currency devaluation and economic turbulence. Nigeria, being one of MTN’s most critical markets, has faced severe economic instability, significantly impacting the company’s bottom line.

Despite these challenges, some MTN subsidiaries have shown resilience. MTN Ghana, for example, reported a 31.2% increase in service revenue during the first half of 2024, reaching GHS 8.1 billion (520 billion). This growth was driven by a rise in mobile subscribers and increased adoption of mobile money services, which have become a crucial part of the company’s revenue stream.

The broader African economic landscape has presented significant hurdles for MTN. The group has faced high inflation rates, currency fluctuations, and geopolitical tensions, particularly in markets like Sudan.

In the first quarter of 2024, MTN Group’s service revenue declined by 18.8% compared to the same period in 2023. However, when adjusted for constant currency terms, the company reported an 11.1% increase, showcasing underlying business growth despite macroeconomic difficulties.

To counteract these economic pressures, MTN has considered strategic measures, including tariff adjustments. In March 2024, the company weighed the possibility of implementing price hikes to offset approximately $101 million in forex-related losses.

This move reflects MTN’s efforts to stabilise its financial performance amid currency devaluations and economic uncertainty.

As MTN prepares to release its full-year financial results for 2024, the company remains focused on navigating the complex economic environment across its operational regions.

Shareholders and stakeholders can expect further details in the upcoming financial disclosures, which will provide a clearer picture of the group’s strategic response to these challenges.

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