Africa's biggest telecoms operator MTN Group on Wednesday said it will swing to a half-year loss, hit by the devaluation of the Nigerian naira and operational challenges in Sudan.
The operator with 288 million customers across 18 markets in Africa said it expects headline earnings per share (HEPS) to slump to a loss of between 217 cents and 271 cents in the six months to June 30 from a profit of 542 cents a year earlier.
South Africa-based 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.
That would reduce group results by 90 cents, MTN said, while foreign exchange losses from the Nigerian unit are estimated to knock off a further 389 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.
It reports first-half results on Aug. 19.
MTN said its Nigerian unit had concluded the renegotiation of local lease agreements with tower operator IHS, including extending existing contracts until the end of 2032.
"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.
MTN Nigeria and IHS have also reached a mutual agreement with American Tower Corporation (ATC) regarding approximately 2,500 sites that were awarded to ATC from IHS' portfolio.
The parties have 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 MTN sites that will be shared by the two tower companies.
Reuters