MTN Nigeria Loses Revenue Leadership for the First Time Since 2019

MTN Nigeria has lost its position as the highest-earning subsidiary within MTN Group after reporting a significant post-tax loss in 2024. The company generated $2.26 billion in revenue, a decline from the previous year, influenced by economic factors. Despite operational challenges, there are signs of potential recovery as tariff increases may improve revenue forecasts.

MTN Nigeria has officially lost its position as the highest-earning subsidiary within the MTN Group for the first time since 2019, reporting a post-tax loss of ₦400.4 billion ($260.2 million) in 2024. The Nigerian unit’s revenue ranking has fallen behind that of the West and Central Africa (WECA) region as well as South Africa, indicating a notable change in the Group’s revenue distribution.

Once contributing approximately 40% of the Group’s total revenue for five consecutive years, MTN Nigeria faced challenges in 2024 due to a depreciating naira and rising inflation that adversely affected earnings. The telecom entity, which commands 51% of Nigeria’s subscriber base, generated $2.26 billion in 2024, a decrease from the $4 billion in revenue recorded in 2023.

Despite a 36% increase in revenue to ₦3.36 trillion in 2024, from ₦2.47 trillion in 2023, MTN Nigeria’s net income suffered due to substantial foreign exchange losses. In contrast, MTN South Africa reported revenues of $2.89 billion, making it the second-largest subsidiary, while the WECA region topped the list with $3.1 billion, with Ghana being its leading contributor, as noted by CEO Ralph Mupita.

The financial difficulties experienced by MTN Nigeria may impact the Group’s future investments in Nigeria, which has previously been the source of significant funding. Although MTN Nigeria received around $986.2 million in 2024 for network expansion and 5G development, ongoing revenue declines could threaten future funding sources, risking both growth and service quality.

Historically, South Africa was the main revenue generator for MTN; however, Nigeria outperformed South Africa in 2013. After regaining its position following setbacks, MTN Nigeria has slipped again in 2024.

Following the recorded losses in 2024, MTN Group suspended revenue guidance for Nigeria, which is a forecast of expected earnings. Nevertheless, after the Nigerian Communications Commission (NCC) approved tariff increases, the company reinstated its revenue outlook. CEO Ralph Mupita expressed optimism about the situation, stating, “We saw inflation ease towards the end of 2024, which gives us confidence… We have not yet completed the implementation of the tariff increases in Nigeria.”

As of December 31, 2024, MTN Group operates in 16 nations across Africa and the Middle East, serving a customer base of 291 million. In response to challenges, the company is refining its operations and focusing on the African market, while it continues to organize into five regional clusters: South Africa, Nigeria, South and East Africa (SEA), West and Central Africa (WECA), and the Middle East and North Africa (MENA).

The performance of MTN Nigeria in the years ahead will hinge on factors such as currency stabilization, reduced inflation, and a revival in consumer spending.

In summary, MTN Nigeria’s revenue challenges represent a significant shift in the MTN Group’s dynamics, marking its first loss of the top revenue position since 2019. The company faces substantial hurdles influenced by economic factors like currency fluctuations and inflation. Recovery in its financial performance will depend on various aspects such as regulatory tariff adjustments and changes in consumer economic conditions. The outlook for future revenue remains cautiously optimistic, amidst these challenges.

Original Source: techcabal.com