MTN Group warned that its annual profits could plunge by 90% due to the devaluation of the Nigeria’s currency affecting its MTN Nigeria unit.
MTN said in a profit warning: “The financial result has… been negativelyaffected 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.”
To showcase a measure of profit, the operator detailed earnings per share are likely to have fallen between 70% and 90% last year, The FT reported.
Since June, the Naira dropped 70% against the US dollar, adding strain to MTN’s business by adding operating and finance costs as well as losses in forex. MTN Nigeria accounts for a third of MTN’s earnings, the group has 79 million customers in the country.
MTN Nigeria recently announced on the Nigerian Stock Exchange it recorded a NGN133.8 billion (US$83 million) net loss in 2023 despite a 22% year-on-year surge in revenue.
MTN Nigeria CEO Karl Toriola noted operating costs for the unit were driven up when the central bank dropped the peg for the naira last year.
“This development contributed meaningfully to the upward pressure on the cost of doing business in Nigeria and, for MTN Nigeria in particular, significantly increased the costs in relation to our tower leases,” said Toriola.
MTN Nigeria leases around 16,000 sites from IHS Towers, which is almost the towerco’s entire footprint. MTN Group has a 26% stake in IHS and wanted voting rights to reflect its stake.
MTN Nigeria announced in September it would switch from IHS to rival American Tower Corporation for leases of over 2,500 towers this year and 2025.
