MTN Nigeria updates: Release of results for the quarter ended 30 September 2023

MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN: ZAE000042164)
(MTN or MTN Group)


MTN Nigeria updates: Release of results for the quarter
ended 30 September 2023 | Revision of unrealised
foreign exchange (forex) losses | Appeal of tax
tribunal decision on VAT assessment

MTN shareholders (Shareholders) are notified that MTN Nigeria has released
its financial results for the quarter-end to 30 September 2023, on the Nigeria
Stock Exchange on 30 October 2023. As MTN Nigeria is a major subsidiary of
MTN, Shareholders are further advised that these financial results can be
viewed at: https://www.mtn.ng/investors/financial-
reporting/?report_cat=quarterly-results.

Revision of unrealised forex losses

Included within MTN Nigeria's results release, was an update relating to the
revision of unrealised forex losses. In order to manage the forex paucity
prevalent in the Nigerian market, MTN Nigeria utilises trade lines to fund
the establishment of confirmed irrevocable letters of credit for its largely
US dollar-denominated network capex investments that sustain revenue growth.
MTN Nigeria holds naira-denominated cash cover with banks, to support these
facilities.

The significant depreciation of the naira against the US dollar, following
liberalisation in June 2023, therefore, gave rise to unrealised forex losses
relating to these trade obligations. Further analysis and review, conducted
after the release of H1 2023 results, determined that in measuring forex
losses for H1 2023, MTN Nigeria incorrectly remeasured all its trade lines
after offsetting the naira-denominated cash cover that was provided to the
banks.

Measuring the forex losses, to correctly exclude the naira-denominated cash
cover, resulted in the recognition of additional unrealised forex losses on
outstanding matured trade obligations at 30 September 2023 of N87.5 billion.
Similarly, MTN Nigeria's net finance costs for H1 2023 would have increased
by N73.9 billion to approximately N295.1 billion.

In terms of the key impacts for MTN Group, the abovementioned revision would
have had the effect of reducing the earnings per share (EPS) reported in
H1 2023 by 65 cents to 446 cents and headline earnings per share (HEPS) by
66 cents to 476 cents. It would have further reduced each of fully diluted
EPS and fully diluted HEPS by 64 cents to 437 cents and 467 cents,
respectively. These effects are summarised in the table below.

Impact on EPS (cents per share)   Jun-22                                    Jun-23
                                           Previous         Restatement, cents     Restatment, %      Restated
EPS                                 445               511                   -65              -12.7%              446
HEPS                                506               542                   -66              -12.2%              476
Fully diluted EPS                   433               501                   -64              -12.8%              437
Fully diluted HEPS                  492               531                   -64              -12.1%              467

The above effects are non-cash in nature and do not impact HEPS after
adjustments for non-operational items. MTN Group results for the quarter
ended 30 September 2023 are scheduled for release on or about Tuesday, 7
November 2023.

MTN Nigeria to appeal Tax Authority Tribunal (TAT) decision on VAT assessment

MTN Nigeria also released its financial statements on 30 October 2023, which
includes an update regarding the decision by the TAT in Nigeria to uphold a
principal VAT liability of US$47.8 million. This pertains to a VAT assessment
for the periods covering 2007 and 2010-2017, as issued by the Federal Inland
Revenue Service (FIRS) to MTN Nigeria. Having reviewed this outcome and
considering input from tax and legal consultants, MTN Nigeria has resolved
to appeal the decision of the TAT. This can be viewed at the aforementioned
link.




Fairland

30 October 2023

Lead Sponsor

J.P. Morgan Equities South Africa Proprietary Limited

Joint Sponsor

Tamela Holdings Proprietary Limited

Date: 30-10-2023 09:40:00
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