MTN says profit to drop as much as 90% due to naira decline
MTN Group, Africa’s biggest wireless service provider by revenue, said full-year profit probably plunged as much as 90% as two devaluations of Nigeria’s currency since June hit its financial performance.
Earnings per share likely fell to a range of R1.07 to R3.21 in the year through December from R10.71 for 2022, the Johannesburg-based company said in a statement Friday.
The naira has depreciated about 70% against the dollar since June last year due to the central bank’s efforts to unify the official and unofficial exchange rates. The Nigerian unit’s weakness has made it the world’s worst performer against the greenback in 2023 after the Lebanese pound among currencies tracked by Bloomberg.
The telecommunications giant has about 77-million customers in Nigeria and historically derives about a third of its earnings from Africa’s most populous nation. The naira has depreciated about 70% against the dollar since June last year due to the central bank’s efforts to unify the official and unofficial exchange rates.
The scarcity of dollars has resulted in the exodus of a number of international businesses that need to repatriate earnings from Nigeria. The West African nation, which has a rapidly growing and increasingly tech-savvy young population, has seen a number of policy missteps, corruption and an over-reliance on oil have fuel dysfunction in the economy. The middle class hasn’t expand as much as expected, and companies are struggling in the current operating environment.
MTN still anticipates declaring a dividend of R3.30 a share for the 2023 financial year.
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