MTN Group Reports Significant Decline in Earnings Amid Currency…

MTN Group’s headline earnings per share fell 68% to 98 cents, influenced by the naira’s further devaluation and conflict in Sudan. The group’s overall service revenue dropped 15.4%, but there were increases in data and fintech revenues when adjusted for constant currency. The company’s balance sheet remains stable, along with expectations for dividend growth and network investments in the upcoming financial year.

MTN Group has experienced a significant decline in its headline earnings per share, reporting a 68% drop to 98 cents, largely due to a further devaluation of the Nigerian naira and ongoing conflict in Sudan. For the financial year ending December 31, 2024, the group disclosed that its service revenue fell by 15.4% to R177.8 billion, though it showed a 13.8% rise in constant currency terms.

Key highlights from the annual results indicate that data revenue fell by 12.3% on a reported basis but increased by 21.9% in constant currency. Fintech revenue exhibited growth, rising 11% as reported and 28.5% in constant currency. Earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased by 33.5% on a reported basis, yet saw a 10.2% increase to R70.1 billion when expressed in constant currency.

The EBITDA margin declined by 8.9 percentage points to 32% in reported terms, and 0.8 percentage points to 38.2% in constant currency. Subscriber growth continued, with total subscribers up by 2.2% to 290.9 million and active data subscribers increasing by 7.7% to 157.8 million. Additionally, monthly active users of Mobile Money rose by 0.9% to 63.1 million.

MTN Group CEO Ralph Mupita expressed satisfaction with the company’s underlying performance and strategic execution for FY2024 despite facing significant operational challenges. He noted some promising macroeconomic indicators, such as inflation and foreign exchange rates, showing relative stability in key markets during the latter half of the year.

The company reported a stable balance sheet, with a net-debt-to-EBITDA ratio of 0.7x at the end of the year, up from 0.4x the previous year, and holding company leverage at 1.4x, aligning with their December 2023 target. MTN’s board has declared a final dividend of R3.45 per share and anticipates increasing this to at least R3.70 in the upcoming 2025 fiscal year.

Additionally, MTN plans to maintain its medium-term guidance, with a projected capital expenditure between R30 billion and R35 billion on network improvements for the 2025 financial year, based on current currency assumptions.

In summary, MTN Group has faced challenges leading to a notable decline in earnings due to currency devaluation and external conflicts. However, the company reported positive growth in fintech, data revenue, and a stable balance sheet. The declaration of dividends and a commitment to continued network investment indicates a strategic focus on future growth despite the current economic adversities.

Original Source: techcentral.co.za