MTN Group Revenue Decline Attributed to Naira Devaluation and Sudan Conflict
MTN Group has reported a declining revenue, primarily due to difficulties in Nigeria and Sudan, with service revenue falling by 15.4%. The company faced significant decreases in earnings, yet subscriber numbers grew, particularly in the fintech sector. Despite negative impacts, leadership remains optimistic about recovery and ongoing portfolio optimization, including strategic sales and future dividend payouts.
The MTN Group has disclosed a revenue decline, largely attributed to difficulties in Nigeria and Sudan. This decline was detailed in the company’s annual financial results concluding on December 31, indicating a reported service revenue reduction of 15.4% to R177.8 billion, although, when adjusted for constant currency, the revenue increased by 13.8%. The situation in Nigeria, particularly the devaluation of the naira, as well as ongoing conflict in Sudan, has significantly impacted operations.
The data segment also saw challenges, with reported revenues declining by 12.3%, yet achieving a growth of 21.9% in constant currency. Additionally, the fintech division observed an 11% revenue increase, reflecting a shift in consumer monetary transactions. In terms of profitability, MTN reported a decrease in EBITDA of 33.5%, with the EBITDA margin declining by 8.9 percentage points.
Financial losses were notable, with basic earnings per share plunging to -531 cents, and a reported headline EPS decrease of 68.9% to 98 cents. MTN’s revenue experienced a further decline of 20.8% in the first half of 2024, dropping to R85.3 billion compared to R107.7 billion in the same period of 2023. Despite these challenges, the company’s total subscribers rose by 2.2% to 290.9 million, and active data subscribers increased by 7.7% to 157.8 million.
MTN Group President and CEO, Ralph Mupita, expressed optimism regarding the company’s performance amidst adverse conditions, noting, “We are pleased to report a strong underlying performance and strategic execution for FY 2024, despite challenges in the operating environment.” He highlighted the stability in critical macroeconomic indicators aiding their performance and positive earnings momentum in the second half of the year.
Key operational successes were also emphasized. The company executed strategies that boosted EBITDA and free cash flow while adapting to macroeconomic adversities, specifically the naira devaluation and heightened inflation. As a testament to its growth, MTN reported a 32.6% increase in data traffic and a 15.3% rise in fintech transaction volumes.
Looking ahead, MTN finalised the divestment from MTN Afghanistan as part of its portfolio optimization strategy. According to Mupita, this exit, alongside the sales of MTN Guinea-Bissau and MTN Guinea-Conakry, better aligns MTN’s focus and risk profile. Significant improvements were made in the Nigerian market with new tower lease contracts resulting in operational expenditure savings of R1.3 billion.
Furthermore, MTN achieved a local ownership increase in Ghana to 30% and met local listing compliance in Uganda through the sale of 7% of its equity. In terms of shareholder returns, the board has declared a dividend of 345 cents per share for FY 2024, with expectations of a minimum ordinary dividend of 370 cents for FY 2025 after the upcoming results announcement in March 2026.
In summary, the MTN Group faced significant revenue declines due to foreign exchange issues in Nigeria and conflict in Sudan. Despite these challenges, the company achieved growth in subscriber numbers and revenue from fintech operations. Looking forward, MTN is executing strategies to optimize its portfolio and enhance operational efficiency while projecting future dividends to shareholders, reflecting resilience amidst a volatile market environment.
Original Source: www.itweb.co.za
