MTN Group warns of H1 loss owing to currency devaluation in Nigeria, crisis in Sudan​

Africa’s biggest telecoms operator, MTN Group has warned that it expects to report a 140% to 150% decrease in headline earnings per share for its half-year results. This was contained in a notice to investors and signed by the Company’s Secretary, Uto Ukpanah.

According to the telco operator, the results are negatively affected by macroeconomic factors, including the further devaluation of the Nigerian naira, and operational challenges in Sudan due to the ongoing conflict.

MTN said the devaluation of the naira versus the U.S. dollar drove higher operating and net finance costs for MTN Nigeria, its biggest market. “The naira devaluation drove higher operating and net finance costs for MTN Nigeria, which are expected to impact the Group H1 24 financial performance,” it said.

According to it, the naira devaluation impact on its Nigerian operating expenses is estimated to reduce the group’s half-year results by 90 cents, compared to a 4% impact last year. “The foreign exchange losses in MTN Nigeria’s financial results are estimated to reduce Group H1 ’24 results by a further 389 cents (2023: 123 cents).”

The company also said a fall in the value of most local currencies would further impact its results which are reported in the South African rand, while conflict in Sudan had led to losses at its unit there.

Another issue was foreign currency translations affecting reporting currency results, MTN said. This includes impacts from certain subsidiaries, which will estimatedly reduce its half-year results by approximately 310 cents.

The breakdown is as follows: MTN Nigeria — 283 cents, Ghana — 15 cents, and South Sudan — 12 cents.

On the bright side, the company assured investors that it expects to report a resilient underlying performance with pleasing momentum in other key African markets. “MTN Ghana and MTN Uganda reported strong H1 ’24 performance, while we expect reporting results for MTN SA that demonstrate encouraging progress in key areas of the business,” it said.

MTN also said it had been encouraged by the progress in cash upstreaming from markets like Nigeria, which supported the holding company’s leverage. The company also reported that its fintech platform has also sustained robust revenue growth trends and ecosystem expansion.

The company will publish its first-half report on August 19.

MTN renegotiates tower lease agreements with IHS

In addition to the trading statement, MTN reported that its Nigerian business has successfully renegotiated its tower lease agreements with IHS Nigeria. This also includes extending existing contracts until the end of 2032.

The renegotiated terms will mitigate macro risks affecting MTN Nigeria’s support margin recovery and help the subsidiary to resolve its negative equity position. It also provides for some discounts and incentives over the life of the contracts. “The renegotiated terms aim to mitigate macro risks affecting MTN Nigeria as well as support margin recovery and resolution of its negative equity position,” the company said.

The telco company also noted that both companies reached a mutual agreement with American Tower Corporation (ATC) regarding approximately 2,500 sites awarded to ATC from IHS’ portfolio.

The parties agreed that ATC will provide tower services at up to about 2,100 sites, while IHS will manage up to approximately 1,400 sites. This includes 1,000 new sites that will be shared by the two tower companies.

“The revised terms meaningfully reduce the US dollar-indexed component of the leases linked to a discounted US consumer price index, making the leases majority naira-linked“, the company explained.

The agreement essentially set a cap for the naira consumer price index escalator component and removed technology-based pricing, allowing payments for new upgrades based on tower space and power.

“The renegotiated agreements incorporate an energy cost component indexed to the cost of providing diesel power,” the statement said.

The post MTN Group warns of H1 loss owing to currency devaluation in Nigeria, crisis in Sudan first appeared on Technext.

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Africa’s biggest telecoms operator, MTN Group has warned that it expects to report a 140% to 150% decrease in headline earnings per share for its half-year results. This was contained in a notice to investors and signed by the Company’s Secretary, Uto Ukpanah.

According to the telco operator, the results are negatively affected by macroeconomic factors, including the further devaluation of the Nigerian naira, and operational challenges in Sudan due to the ongoing conflict.

MTN said the devaluation of the naira versus the U.S. dollar drove higher operating and net finance costs for MTN Nigeria, its biggest market. “The naira devaluation drove higher operating and net finance costs for MTN Nigeria, which are expected to impact the Group H1 24 financial performance,” it said.

According to it, the naira devaluation impact on its Nigerian operating expenses is estimated to reduce the group’s half-year results by 90 cents, compared to a 4% impact last year. “The foreign exchange losses in MTN Nigeria’s financial results are estimated to reduce Group H1 ’24 results by a further 389 cents (2023: 123 cents).”

The company also said a fall in the value of most local currencies would further impact its results which are reported in the South African rand, while conflict in Sudan had led to losses at its unit there.

Another issue was foreign currency translations affecting reporting currency results, MTN said. This includes impacts from certain subsidiaries, which will estimatedly reduce its half-year results by approximately 310 cents.

The breakdown is as follows: MTN Nigeria — 283 cents, Ghana — 15 cents, and South Sudan — 12 cents.

On the bright side, the company assured investors that it expects to report a resilient underlying performance with pleasing momentum in other key African markets. “MTN Ghana and MTN Uganda reported strong H1 ’24 performance, while we expect reporting results for MTN SA that demonstrate encouraging progress in key areas of the business,” it said.

MTN also said it had been encouraged by the progress in cash upstreaming from markets like Nigeria, which supported the holding company’s leverage. The company also reported that its fintech platform has also sustained robust revenue growth trends and ecosystem expansion.

The company will publish its first-half report on August 19.

MTN renegotiates tower lease agreements with IHS

In addition to the trading statement, MTN reported that its Nigerian business has successfully renegotiated its tower lease agreements with IHS Nigeria. This also includes extending existing contracts until the end of 2032.

The renegotiated terms will mitigate macro risks affecting MTN Nigeria’s support margin recovery and help the subsidiary to resolve its negative equity position. It also provides for some discounts and incentives over the life of the contracts. “The renegotiated terms aim to mitigate macro risks affecting MTN Nigeria as well as support margin recovery and resolution of its negative equity position,” the company said.

The telco company also noted that both companies reached a mutual agreement with American Tower Corporation (ATC) regarding approximately 2,500 sites awarded to ATC from IHS’ portfolio.

The parties agreed that ATC will provide tower services at up to about 2,100 sites, while IHS will manage up to approximately 1,400 sites. This includes 1,000 new sites that will be shared by the two tower companies.

“The revised terms meaningfully reduce the US dollar-indexed component of the leases linked to a discounted US consumer price index, making the leases majority naira-linked“, the company explained.

The agreement essentially set a cap for the naira consumer price index escalator component and removed technology-based pricing, allowing payments for new upgrades based on tower space and power.

“The renegotiated agreements incorporate an energy cost component indexed to the cost of providing diesel power,” the statement said.

The post MTN Group warns of H1 loss owing to currency devaluation in Nigeria, crisis in Sudan first appeared on Technext.

 Africa’s biggest telecoms operator, MTN Group has warned that it expects to report a 140% to 150% decrease…
The post MTN Group warns of H1 loss owing to currency devaluation in Nigeria, crisis in Sudan first appeared on Technext.  

Africa’s biggest telecoms operator, MTN Group has warned that it expects to report a 140% to 150% decrease in headline earnings per share for its half-year results. This was contained in a notice to investors and signed by the Company’s Secretary, Uto Ukpanah.

According to the telco operator, the results are negatively affected by macroeconomic factors, including the further devaluation of the Nigerian naira, and operational challenges in Sudan due to the ongoing conflict.

MTN said the devaluation of the naira versus the U.S. dollar drove higher operating and net finance costs for MTN Nigeria, its biggest market. “The naira devaluation drove higher operating and net finance costs for MTN Nigeria, which are expected to impact the Group H1 24 financial performance,” it said.

According to it, the naira devaluation impact on its Nigerian operating expenses is estimated to reduce the group’s half-year results by 90 cents, compared to a 4% impact last year. “The foreign exchange losses in MTN Nigeria’s financial results are estimated to reduce Group H1 ’24 results by a further 389 cents (2023: 123 cents).”

The company also said a fall in the value of most local currencies would further impact its results which are reported in the South African rand, while conflict in Sudan had led to losses at its unit there.

Another issue was foreign currency translations affecting reporting currency results, MTN said. This includes impacts from certain subsidiaries, which will estimatedly reduce its half-year results by approximately 310 cents.

The breakdown is as follows: MTN Nigeria — 283 cents, Ghana — 15 cents, and South Sudan — 12 cents.

On the bright side, the company assured investors that it expects to report a resilient underlying performance with pleasing momentum in other key African markets. “MTN Ghana and MTN Uganda reported strong H1 ’24 performance, while we expect reporting results for MTN SA that demonstrate encouraging progress in key areas of the business,” it said.

MTN also said it had been encouraged by the progress in cash upstreaming from markets like Nigeria, which supported the holding company’s leverage. The company also reported that its fintech platform has also sustained robust revenue growth trends and ecosystem expansion.

The company will publish its first-half report on August 19.

MTN renegotiates tower lease agreements with IHS

In addition to the trading statement, MTN reported that its Nigerian business has successfully renegotiated its tower lease agreements with IHS Nigeria. This also includes extending existing contracts until the end of 2032.

The renegotiated terms will mitigate macro risks affecting MTN Nigeria’s support margin recovery and help the subsidiary to resolve its negative equity position. It also provides for some discounts and incentives over the life of the contracts. “The renegotiated terms aim to mitigate macro risks affecting MTN Nigeria as well as support margin recovery and resolution of its negative equity position,” the company said.

The telco company also noted that both companies reached a mutual agreement with American Tower Corporation (ATC) regarding approximately 2,500 sites awarded to ATC from IHS’ portfolio.

The parties agreed that ATC will provide tower services at up to about 2,100 sites, while IHS will manage up to approximately 1,400 sites. This includes 1,000 new sites that will be shared by the two tower companies.

“The revised terms meaningfully reduce the US dollar-indexed component of the leases linked to a discounted US consumer price index, making the leases majority naira-linked“, the company explained.

The agreement essentially set a cap for the naira consumer price index escalator component and removed technology-based pricing, allowing payments for new upgrades based on tower space and power.

“The renegotiated agreements incorporate an energy cost component indexed to the cost of providing diesel power,” the statement said.