MTN Group warned on Thursday that it will report a sharp decline in full-year headline earnings per share (Heps) as foreign exchange losses continue to pummel its profits despite what it has described as a good operational performance.

Heps for the year ended 31 December 2024 will decline by between 59% and 79%, MTN said, while earnings per share will plunge by more than 100%. Despite this, its share price rallied in Thursday morning trading in Johannesburg before giving up those gains. Earlier in the trading session, the share touched R124.16, a 52-week high.

It said Heps was negatively impacted by non-operational items of some -R7.18/share, including hyperinflation adjustments of -16c (2023: -R1.50); forex losses of -R5.98, which includes Nigerian naira depreciation impact of -R3.99 (2023: -R5.93); deferred tax charge of -58c (2023: nil); and other non-operational items of -46c (2023: -23c).

Despite the weak earnings, MTN reiterated that it expects to report a “strong underlying performance” for the 2024 financial year when it publishes its full-year numbers next month.

“We are encouraged by the relative stability of some important key macroeconomic indicators in the second half of 2024, such as inflation and forex rates in some of our key markets. This provided some support to our performance in the period, and we anticipate reporting a pleasing positive momentum in H2 earnings, free cash flow and holding company leverage ratio,” it said.

“In our larger operations, we expect to report an improvement in the trajectory of MTN South Africa’s profitability, particularly in H2, as well as strong operational performances in MTN Nigeria, MTN Ghana and MTN Uganda.”

‘Significant milestone’

The group said the January 2025 approval of tariff adjustments by regulators in Nigeria was a “significant milestone in ensuring the long-term sustainability of our business and the telecoms industry in the country”.

“MTN Nigeria has started to implement the tariff adjustments, which represent an important step towards addressing the impacts of the prevailing economic challenges on the operation,” it said.

Read: Ralph Mupita to stay on at MTN until 2030

“The financial results, however, remained affected by several external factors including the negative impact of local currency devaluation in FY24, particularly the naira, against the US dollar on our results. This included both translation effects and forex losses in our financials.”

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