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MTN Group is expecting a sharp decline in its first-half 2026 reported earnings after geopolitical tensions in Iran triggered a major impairment on the telecom giant’s investment in Iranian operator Irancell.
In a trading update ahead of its interim results, MTN said headline earnings per share (HEPS) could fall by as much as 10%, while basic earnings per share (EPS) are expected to decline between 20% and 30% for the six months ended June 30, 2026.
The earnings pressure comes despite stronger underlying operating performance across the group, highlighting the impact that MTN’s long-standing exposure to Iran continues to have on its financial statements.
Iran Investment Drives Earnings Pressure
MTN expects impairment losses associated with its Iranian operations to amount to approximately R2.13 per share, compared with R1.04 per share in the first half of 2025.
The impairment was linked to the worsening geopolitical and economic environment, including the war in Iran during the reporting period.
As a result, MTN expects basic EPS to come in between R3.77 and R4.31, representing a decline of 20% to 30%.
Headline EPS is expected to fall by up to 10% to between R5.80 and R6.45.
However, the figures paint a different picture when one-off and non-operational effects are excluded.
Underlying Performance Remains Strong
MTN expects its adjusted headline earnings per share to increase between 18% and 23%, reaching a range of R7.75 to R8.08, compared with R6.57 recorded in the corresponding period of 2025.
The company said this measure provides a better indication of its underlying operating performance because it removes the impact of significant non-operational items.
MTN reported that its broader business continued to deliver resilient performance, with service revenue growing broadly in line with its medium-term expectations.
The group also pointed to stronger EBITDA margins, improved free cash flow and solid cash upstreaming as positive features of the first-half performance.
Irancell Investment Remains Difficult to Monetise
MTN owns a 49% stake in Irancell, an investment it has held since 2006.
Although Irancell contributes to MTN’s reported share of joint-venture performance, the South African telecom group has faced significant restrictions in converting the investment’s earnings into usable cash.
MTN previously disclosed that it had neither extracted capital or dividends from, nor invested additional capital into, the Iranian business since May 2018, following the reimposition of US sanctions after Washington withdrew from the Iran nuclear agreement.
The latest impairment therefore reflects a reassessment of the investment’s value amid sanctions, economic pressures, currency challenges and renewed geopolitical instability.
MTN Has Considered Exiting Iran
The challenges surrounding Irancell have also fuelled MTN’s long-standing interest in exiting the investment if regulatory and sanctions conditions allow.
In March 2026, MTN Group CEO Ralph Mupita indicated that the company would seek to leave Iran if circumstances permitted.
The group has also maintained a limited operational presence in the country, with no MTN executives on the ground and no participation on Irancell’s board for some time.
This leaves MTN in an unusual position: it continues to recognise its share of Irancell’s financial performance while having limited ability to access the cash generated by the investment.
Other Businesses Also Face Pressure
The Iran impairment was not the only factor affecting MTN’s first-half outlook.
The company said its fintech operations experienced some pressure during the period, partly because of the regulatory suspension of airtime advances in Nigeria.
MTN also highlighted continued weakness in South Africa’s prepaid market, particularly in voice revenue during the second quarter.
Despite these challenges, the group maintained that its overall commercial performance remained resilient and that disciplined capital allocation supported stronger cash generation.
IHS Acquisition Moves Forward
MTN is simultaneously progressing with its proposed acquisition of the remaining shares in IHS Towers, a transaction that would give it full ownership of the tower company.
The group said regulatory approvals across the various jurisdictions where IHS operates remain the only outstanding condition precedent to completion of the transaction.
The acquisition is part of MTN’s broader strategy to strengthen its control over critical digital infrastructure as demand for connectivity, data and related services continues to expand across its African markets.
The Bigger Picture
The latest earnings warning underscores the difference between MTN’s underlying business performance and the accounting impact of its Iranian investment.
While the group’s adjusted earnings are expected to rise significantly, the impairment and other non-operational effects are pulling reported profitability lower.
For MTN, the longer-term challenge remains finding a way to resolve its exposure to Irancell. Until the company can monetise or exit the investment, geopolitical developments in Iran could continue to create volatility in its reported earnings.
The first-half results, due on August 24, 2026, will provide a clearer picture of how MTN’s operations performed across its major African markets and how significant the Iran-related impairment ultimately proves to be.
