MTN Group announced that in its report for the first six months ending in June, the company will record a material impairment of its 49% stake in Irancell. This statement was made in a trading update before the release of interim financial results scheduled for August 24. This write-down leads to a sharp decline in accounting profit, despite an improvement in the group's underlying operational performance.
The losses from impairment amounting to R2.13 per share, which are higher than R1.04 in the first half of 2025 and related to operations in Iran, are the main reason why MTN forecasts a drop in earnings per share by 20–30%, to a level between R3.77 and R4.31. Meanwhile, expected earnings per share on core metrics will be between R5.80 and R6.45, representing a decrease of 10%.
However, the group's preferred metric shows a different picture. Adjusted earnings per share, excluding impairments, hyperinflation effects, and currency fluctuations, are forecast to grow by 18–23%, reaching between R7.75 and R8.08. MTN explains the discrepancy with non-operating items totaling R1.78, including R1.26 in foreign exchange losses and 52 cents from hyperinflation accounting.
The company described this impairment as a result of 'geopolitical and economic conditions, as well as the war in Iran during the reporting period.' Nevertheless, the article's author argues that this underestimates the duration of the problem with this asset and the limited impact of the war on MTN's prospects regarding it.
Since May 2018, MTN has not received capital or dividends from Iran, after the Trump administration re-imposed sanctions following the withdrawal from the nuclear deal. The group's CEO, Ralph Mupita, previously referred to this stake as a 'frozen asset,' indicating that funds could neither flow in nor out. The stake generated profits that MTN could not receive; the company valued its share of Irancell's profit for 2025 at $136 million, none of which was repatriable.
Thus, the impairment reflects not the loss of something MTN used, but the accounting recognition that the asset ceased to be viable many years ago. The war merely eliminated the last grounds for maintaining the stake at its previous value.
Catastrophic Consequences
The scale of the revaluation is easily overlooked against the per-share figures. Before the conflict, Iran accounted for approximately 4% of the group's net assets and about 7% of adjusted earnings per share—modest, but not insignificant figures that are now substantially impaired.
The first half of 2026 proved catastrophic for Iran and, consequently, for any hopes MTN had of benefiting from Irancell in the foreseeable future. The American and Israeli air campaign struck targets across the country. Control over the operator, which was already beyond MTN's control, shifted further into the hands of the Islamic Revolutionary Guard Corps, an organization designated as a terrorist group by the US, after most shareholders replaced the CEO in January due to delays in complying with a government order to cease communications.
MTN owns 49% of Irancell. The remaining 51% belongs to Iranian state structures and defense-related organizations, and MTN has repeatedly stated that it has no operational control and does not benefit from the investment. The company has been trying to exit this deal since 2020 but has found no mechanism, as sanctions impede both the movement of money and the sale of shares.
The asset write-down eliminates the valuation problem but does not remove the legal and reputational issues associated with it: MTN disclosed in August 2025 that it is the subject of a grand jury investigation by the US Department of Justice regarding its former business in Afghanistan and its stake in Irancell. Furthermore, the company is defending itself in US lawsuits under the Anti-Terrorism Act initiated by families of more than 500 American service members who claim that investments in Irancell benefited the Revolutionary Guard. MTN denies guilt and states that the plaintiffs filed the suit incorrectly. The Turkish operator Turkcell is pursuing a separate multi-billion dollar lawsuit, alleging that the initial Iranian license was obtained through bribery, which MTN also denies.
Improvements in the core business are real and detailed in recent reports from the group for South Africa and Africa overall. However, the main news of this period will be related to Iran—an asset MTN has wanted to divest for six years and which it is now forced to impair without the ability to sell it.
