MTN Group’s profits have plummeted due to the Nigerian naira’s devaluation and Sudan’s conflict, with HEPS down 69% year-over-year. Despite this, the CEO sees signs of recovery in Nigeria, supported by new pricing strategies. Challenges in Sudan persist, impacting operations. Meanwhile, South Africa’s service revenue rose, countering declines in Nigeria. MTN is also optimizing its portfolio and plans future investments amid macroeconomic uncertainties.
MTN Group’s profitability has continued to be adversely affected by the Nigerian naira’s devaluation and ongoing conflict in Sudan. The company’s headline earnings per share (HEPS) decreased by nearly 69% year-over-year in the financial year ending December 31, 2024. However, if currency fluctuations are ignored, HEPS would have risen by 13.8%. The CEO acknowledged the difficulties but is optimistic about the underlying growth potential despite macroeconomic issues.
MTN’s performance in Nigeria remains challenging due to the naira’s significant devaluation. Mupita expressed optimism regarding recovery, citing initial signs of naira stabilization and declining inflation. The company is implementing several strategies to restore profitability, including renegotiating tower lease contracts, which yielded substantial savings. Additionally, MTN plans to increase prices after receiving regulatory approval for a 50% tariff increase, expecting this to drive revenue.
The ongoing Sudan conflict has exacerbated operational challenges for MTN, characterized by power outages and fuel shortages, significantly impacting its network presence. Mupita indicated improvements are occurring, as some sites began reopening in December 2024. This situation has contributed to a rapid inflationary climate hindering financial output.
In terms of overall service revenue, MTN experienced a 15.4% decrease, with Nigeria alone seeing a 45% drop. Contrarily, South Africa demonstrated resilience with a 3.1% service revenue increase. This growth was supported by enhanced network availability and new commercial initiatives, contributing significantly to the overall group’s revenue stream.
MTN’s group EBITDA also suffered a notable decline, dropping by one-third year-over-year. Alternatively, maintaining currency stability would have resulted in a 10.2% EBITDA increase. Despite facing these challenges, the company managed to invest approximately R29.9 billion to enhance its network infrastructure, with future expenditures for 2025 projected between R30-35 billion.
MTN’s subscriber base reflected a growth of 2.2% to 290.9 million, driven by strong data usage despite challenges in Sudan affecting overall customer numbers. Data revenue exhibited a decline, whereas fintech transaction volumes and active users increased, indicating growth potential in digital services despite a broader revenue dip.
MTN is also strategically optimizing its portfolio, having exited several underperforming markets, including Afghanistan and Guinea-Bissau. There are plans to enhance localization in Ghana and ensure compliance with local listing requirements in Uganda, revealing the group’s focus on aligning with regulatory frameworks in operating regions. Mupita remains hopeful about the future, expecting to capitalize on narrowing inflation and reduced currency volatility for sustained growth.
MTN Group’s financial performance continues to struggle due to the devaluation of the Nigerian naira and disruptions in Sudan. Nevertheless, the company is taking strategic measures to foster recovery and enhance its profitability. Recent growth in subscriber numbers and service revenue, especially in South Africa, coupled with efforts to optimize its portfolio, position MTN well for potential growth amidst ongoing macroeconomic challenges.
Original Source: www.connectingafrica.com
