MTN Group’s revenue declined due to challenges in Nigeria and Sudan, with a reported 15.4% drop in service revenue. Despite this, data and fintech revenues increased. Operational costs rose substantially, leading to a significant loss in earnings. The firm aims for strategic recovery and portfolio optimization while considering future dividend growth.
MTN Group reported a decline in revenue attributed to significant challenges in Nigeria and Sudan. The largest mobile operator in Africa released its financial results for the fiscal year ending December 31, noting the impacts of foreign exchange devaluation, especially the naira, and ongoing conflict in Sudan. Despite this, service revenue decreased by 15.4% to R177.8 billion but showed a constant currency increase of 13.8%.
Data revenue also dropped by 12.3% in reported figures, yet it rose 21.9% when adjusted for constant currency. In contrast, MTN’s fintech revenue grew by 11% during the same period. EBITDA fell by 33.5%, and the EBITDA margin reduced by 8.9 percentage points, indicating substantial profit margin pressures. Basic earnings per share plunged to a loss of -531 cents, with reported headline EPS down by 68.9% to 98 cents.
In the first half of 2024, MTN faced a revenue decline of 20.8% to R85.3 billion compared to R107.7 billion in the first half of 2023. Subscriber counts grew by 2.2% to 290.9 million and active data subscribers climbed by 7.7% to 157.8 million. Monthly active users for Mobile Money (MoMo) increased by 0.9%, and data traffic saw a significant rise of 32.6% to 19,459 petabytes. MTN’s fintech transactions also rose by 15.3% to 20.3 billion.
MTN Group President and CEO Ralph Mupita expressed optimism about the underlying performance despite the unfavorable operating conditions. He emphasized progress in macroeconomic indicators, such as inflation and foreign exchange rates in key markets, which aided performance in the latter half of the fiscal year. The company managed to implement tariff amendments in Nigeria, contributing to a healthier financial situation toward year’s end.
Mupita highlighted that operationally, the impacts from the naira’s devaluation and inflation persisted, alongside geopolitical volatility particularly in Sudan, where ongoing conflict adversely affected operations. MTN’s capital expenditures reached R29.9 billion, aimed at enhancing network quality and capacity. This investment strategy led to a robust increase in data traffic and fintech service growth.
As of fiscal year-end 2024, MTN held a subscriber base of 291 million, reflecting a net addition of 6.2 million customers, notwithstanding the loss of subscribers in conflict-ridden Sudan. Active data users and MoMo MAU saw steady growth, although MoMo’s user growth rate moderated due to strategic improvements in the fintech ecosystem.
MTN has also optimized its portfolio by finalizing the sale of MTN Afghanistan and planning exits from other Middle Eastern operations. The renegotiation of tower lease contracts in Nigeria has led to notable operational cost savings. Furthermore, MTN Ghana exceeded local ownership requirements, and the company is taking steps to meet compliance regulations in MTN Uganda.
The MTN Group declared a dividend of 345 cents per share for fiscal year 2024, with expectations to increase this to a minimum of 370 cents for fiscal year 2025, contingent upon full-year results to be announced in March 2026.
MTN Group’s financial performance has been significantly affected by challenges in Nigeria and Sudan, evidenced by declines in revenue and earnings. The company managed to achieve growth in data and fintech segments amidst these adversities. Operational improvements and strategic milestones are observed, alongside expectations for future dividend increments. Overall, while the company faces tough economic conditions, it strives to maintain positive momentum and optimize its operations.
Original Source: www.itweb.co.za
