MTN Group CEO Forecasts Recovery in Nigeria Amid Financial Challenges

MTN Group CEO Ralph Mupita asserts that the company’s challenges in Nigeria are diminishing, following a significant pre-tax loss due to naira devaluation and high inflation. Strategic actions, including renegotiated leases and tariff increases, are expected to aid recovery. While the business faces hurdles in Sudan, Mupita remains optimistic about the future, despite overall service revenue declines.

Ralph Mupita, the CEO of MTN Group, has indicated that the company is moving past its most challenging period, particularly regarding its Nigerian operations. The company faced a significant pre-tax loss of R4.4 billion, primarily due to the devaluation of the naira amidst ongoing dollar shortages. High inflation and rising interest rates have also contributed to a staggering pre-tax loss of over 200% for MTN Nigeria, amounting to ₦550.3 billion (R6.4 billion).

At the group level, MTN reported a pre-tax loss of R4.4 billion for the fiscal year ending December 31, a significant decline from the R12.2 billion profit recorded in 2023. To address the financial strain, MTN Nigeria is implementing several measures to restore profitability, including renegotiating tower leases and increasing tariffs, the latter of which received approval in January.

Mupita expressed optimism about the company’s recovery, stating that the prolonged difficulties are beginning to ease, with the business exhibiting strong growth. He voiced confidence in a successful turnaround for MTN in Nigeria during a recent media call. The company has saved R3.8 billion in costs, including R1.2 billion from newly renegotiated tower leases.

Additionally, the ongoing armed conflict in Sudan has negatively impacted MTN’s performance there, resulting in impairments totaling R11.7 billion. Despite these challenges, Mupita noted that there are signs of improvement, with some network services being restored in conflict-affected areas, including Khartoum. Peter Takaendesa from Mergence Investment Managers acknowledged that while MTN’s underlying performance appears robust, external macroeconomic factors pose significant challenges beyond their control.

Overall, MTN’s group service revenue has experienced a 15% decline to R177.8 billion; however, it saw a 14% increase when adjusted for constant currency adjustments.

In summary, MTN Group is gradually overcoming its financial challenges in Nigeria, as articulated by CEO Ralph Mupita. The company is implementing strategic initiatives aimed at restoring profitability amidst adverse economic conditions. Although operational struggles persist in Sudan due to armed conflict, the management remains optimistic about recovery. Future performance may still be influenced by external macroeconomic factors beyond MTN’s control.

Original Source: techcentral.co.za