MTN Group Optimistic About Recovery in Nigeria Amidst Economic Challenges

Ralph Mupita, CEO of MTN Group, indicates recovery is underway in Nigeria following a devaluation of the naira, despite significant pre-tax losses. Initiatives like renegotiated tower leases and tariff increases are in play. In contrast, operations in Sudan suffer due to conflict, impacting financial performance. Despite challenges, MTN retains a positive outlook for future growth.

Ralph Mupita, the CEO of MTN Group, has expressed optimism regarding the recovery of MTN’s operations in Nigeria, suggesting that the most challenging period is over. This follows a significant devaluation of the naira, which contributed to an annual pre-tax loss of R4.4 billion for the group. The Nigerian economy faces ongoing dollar shortages, prompting authorities to devalue the naira to stabilize the currency and attract investments.

The country is grappling with elevated inflation and interest rates, causing costs to surge and widening MTN Nigeria’s pre-tax loss by over 200% to ₦550.3 billion (approximately R6.4 billion). At the group level, MTN reported a pre-tax loss of R4.4 billion for the fiscal year ending 31 December, a decline from a profit of R12.2 billion in 2023. To restore profitability, MTN’s Nigerian unit is implementing several initiatives, including renegotiating tower leases and adjusting tariffs, with the latter being approved in January.

Mupita noted, “That pain which we’ve had for 18 months, is abating somewhat… the business is growing very strongly. So I’m actually very bullish and confident that we’ll see strong recovery in Nigeria.” MTN Group serves 291 million customers across 16 African markets and achieved cost savings of R3.8 billion, with R1.2 billion attributed to renegotiated tower leases, according to Chief Financial Officer Tsholofelo Molefe.

In other regions, particularly Sudan, MTN’s operational and financial performance has suffered due to ongoing armed conflict, resulting in impairments totaling R11.7 billion. Mupita remarked that the company has begun to restore network services in conflict-affected areas, including the capital Khartoum, where operations had been suspended since April 2023. Despite a 15% decline in group service revenue to R177.8 billion, revenue measured in constant currency grew by 14%.

In summary, MTN Group is poised for recovery in Nigeria after experiencing significant losses due to naira devaluation and economic challenges. The company’s strategic initiatives aimed at restoring profitability are underway. Meanwhile, operations in Sudan remain complex due to conflict, though steps are being taken to revive services. Overall, MTN retains a resilient outlook as it navigates these financial terrains.

Original Source: techcentral.co.za