MTN Group, a prominent telecoms giant, is slated to disclose a substantial decrease in its full-year headline earnings per share (HEPS) when its annual report is released next month. The mobile operator attributes this expected decline, projected to be between 59% and 79% for the year ending December 31, 2024, primarily to the deteriorating impact of foreign exchange fluctuations on its profitability, despite demonstrating a strong operational performance. Conversely, earnings per share are anticipated to increase by over 100%.

Despite the projected weak headline earnings, MTN anticipates reporting a robust underlying performance for the 2024 financial year. The group expressed optimism regarding the relative stability of key macroeconomic indicators, such as inflation and forex rates, in some of its key markets during the second half of 2024. This stability is expected to have provided support to its performance, leading to a pleasing positive momentum in H2 earnings, free cash flow, and the holding company leverage ratio. Furthermore, larger operations like MTN Nigeria are expected to show an improved profitability trajectory, particularly in the latter half of the year, alongside strong operational performances in MTN South Africa, MTN Ghana, and MTN Uganda.

The group detailed that the HEPS was negatively affected by various non-operational items. These include hyperinflation adjustments totaling approximately -$0.39 per share, forex losses of -$0.32, and the impact of Nigerian naira depreciation at -$0.22, in addition to deferred tax charges and other non-operational factors. MTN Group's full annual results are scheduled for publication on March 17, 2025.

Adding to its positive outlook, MTN highlighted the January 2025 approval of tariff adjustments by the Nigerian Communications Commission (NCC) as a crucial milestone for ensuring the long-term sustainability of its business and the broader telecoms industry in Nigeria. Following months of debate, the NCC approved a 50% telecom tariff hike. Subsequently, MTN Nigeria implemented a 200% increase across voice and data calls, though the company claimed to have reversed this hike, it confirmed implementation to address prevailing economic challenges. The company's financial results continue to be influenced by external factors, notably the negative impact of local currency devaluation, especially the Nigerian naira against the US dollar, which has led to both translation effects and direct forex losses.

The challenges of naira depreciation and economic decline are not unique to MTN. Airtel Nigeria, another major telecom operator, reported a similar negative impact. Its mobile services revenue declined by 40.34% to $738 million for the year ending December 31, 2024, down from $1.2 billion in the previous year. Specifically, Airtel Nigeria's mobile voice revenue fell by 46.34% to $315 million, and data revenue dropped to $344 million in December 2024, marking a 36.28% shift from $539 million recorded in December 2023.

In response to these economic pressures, Airtel Nigeria also adjusted its voice and data pricing model by up to 50%, increasing SMS charges to N6 from N4. These new tariffs, affecting various data bundles, are a direct response to ongoing industry concerns over inflation, forex volatility, and escalating operational costs. Airtel Nigeria's Chief Executive Officer, Dinesh Balsingh, emphasized that this price increase, deemed essential for the industry's survival and growth, will enable continued investment in network infrastructure, expanded coverage, and the delivery of improved products and services to meet evolving customer needs.