MTN Nigeria Loses Top Revenue Position for First Time Since 2019
MTN Nigeria has lost its status as the top revenue source within the MTN Group, reporting a post-tax loss of ₦400.4 billion in 2024. This decline, attributed to currency depreciation and inflation, resulted in a revenue drop to $2.26 billion from $4 billion in 2023. The WECA region and South Africa surpassed Nigeria in revenue. Future investment prospects depend on economic recovery in Nigeria.
MTN Nigeria has experienced a notable decline, losing its designation as the MTN Group’s top revenue-generating subsidiary for the first time since 2019. The company reported a post-tax loss of ₦400.4 billion ($260.2 million) in 2024, falling behind the West and Central Africa (WECA) region and South Africa in revenue standings, indicating a significant change in the Group’s financial landscape.
Historically, MTN Nigeria accounted for approximately 40% of the Group’s total revenue. However, the economic challenges of 2024, including a weakened naira and rising inflation, led to a decline in earnings. While the Nigerian subsidiary retained 51% of Nigeria’s subscriber base, it generated only $2.26 billion in 2024, a considerable drop from $4 billion in 2023.
Despite a robust 36% increase in revenue to ₦3.36 trillion in 2024 (up from ₦2.47 trillion in 2023), foreign exchange losses significantly impacted MTN Nigeria’s profitability. In contrast, MTN South Africa reported revenues of $2.89 billion, overtaking Nigeria, while the WECA region led with earnings of $3.1 billion, with Ghana being the foremost contributor, as stated by MTN Group CEO Ralph Mupita.
The downturn in MTN Nigeria’s finances raises concerns about the Group’s future investments in Nigeria, its largest African market. Although MTN Nigeria received about $986.2 million in 2024 for network expansion and 5G deployment, further revenue declines could threaten future funding, impacting the company’s growth trajectory and service capabilities.
Traditionally, South Africa has been the dominant revenue source for the Group. Nigeria first overtook South Africa in 2013, maintaining the lead until 2017 when it began repaying a fine. The subsidiary regained its top position in 2019 but slipped again in 2024.
In light of the unexpected losses in 2024, MTN Group decided to suspend revenue guidance for Nigeria, a measure typically used to project future earnings; however, this was later reinstated following tariff increases approved by the Nigerian Communications Commission (NCC). “We saw inflation ease towards the end of 2024, which gives us confidence,” remarked CEO Ralph Mupita during an investor call, while noting the ongoing implementation of tariff adjustments in Nigeria.
As of December 31, 2024, MTN Group operates in 16 countries across Africa and the Middle East, serving 291 million customers. The company is undergoing a strategic consolidation of its operations, streamlining its focus on African markets. Presently, MTN is segmented into five regional clusters: South Africa, Nigeria, South and East Africa (SEA), West and Central Africa (WECA), and the Middle East and North Africa (MENA).
MTN Nigeria’s future performance is expected to be influenced by factors such as a stable naira, decreasing inflation, and a recovery in consumer purchasing power.
In summary, MTN Nigeria’s decline in revenue marks a significant shift in the dynamics of the MTN Group, particularly as it attempts to navigate economic challenges. The prospect of future investments is contingent on market stabilization and economic recovery. Continued scrutiny of its financial health and strategic operations will be essential as MTN Group adapts to the evolving market landscape.
Original Source: techcabal.com
