MTN Group Revenue Declines Amidst Nigerian Naira Devaluation and Sudan Conflict

MTN Group has experienced a revenue decline due to challenges in Nigeria and the conflict in Sudan, reporting a 15.4% drop in service revenue. Despite this, the company noted growth in subscribers and data services. CEO Ralph Mupita highlighted operational successes and future strategic focuses, including asset sales and lease renegotiations, supporting a positive outlook for dividends going forward.

MTN Group has reported a decline in revenue for the year ending December 31, primarily due to difficulties encountered in Nigeria and the ongoing conflict in Sudan. The business attributed significant impacts from foreign exchange devaluation, especially regarding the Nigerian naira. Overall service revenue fell by 15.4% to R177.8 billion, although it saw a constant currency increase of 13.8%.

Reported data revenue decreased by 12.3%, yet a constant currency basis showed a 21.9% increase, with fintech revenue rising by 11%. Despite these positive aspects, MTN experienced a 33.5% reduction in EBITDA and an 8.9-point drop in EBITDA margin. Basic earnings per share fell dramatically to a loss of -531 cents.

In the first half of 2024, revenues declined by 20.8% to R85.3 billion, a significant drop compared to R107.7 billion in H1 2023. Nonetheless, MTN reported a 2.2% rise in total subscribers, reaching 290.9 million, and a 7.7% increase in active data subscribers. Mobile Money users increased slightly by 0.9% to 63.1 million, and data traffic surged by 32.6%.

Ralph Mupita, MTN Group president and CEO, expressed optimism despite difficulties in the operational environment, emphasizing strong macroeconomic indicators in some key markets in H2. He noted that these conditions led to improved earnings, cash flow, and leverage ratio. Mupita acknowledged the strategic successes achieved in crucial markets despite the pressures from naira devaluation and heightened inflation.

MTN’s capital expenditure reached R29.9 billion, effectively enhancing network quality and capacity. Growth was reflected in data traffic and fintech volume, which saw a substantial rise. Mupita shared that ending FY 2024 clarified the subscriber base, now at 291 million, excluding markets exited that year.

MTN’s optimisation strategies included finalising the sale of MTN Afghanistan and other operations, nurturing a sharper focus in its portfolio. It renegotiated more sustainable tower lease contracts in Nigeria, yielding operational savings and aligning with efficiency initiatives. Furthermore, MTN Ghana exceeded localization regulations, with local ownership increasing to 30%. The board also declared a FY 2024 dividend of 345 cents per share, with future dividends expected to rise in FY 2025.

The MTN Group has faced substantial challenges impacting its revenue, primarily due to the depreciation of the Nigerian naira and the conflict in Sudan. Despite these difficulties, the company reported growth in subscriber numbers and active data usage, alongside a strong performance in fintech services. Continued strategic adjustments and operational efficiencies are expected to support future growth, alongside a commitment to increasing shareholder returns through dividends.

Original Source: www.itweb.co.za