MTN Group Reports Profit from Guinea-Bissau Sale Amid Loss from…

MTN Group reported a gain of $15.8 million from the sale of its Guinea-Bissau subsidiary, part of a strategic shift from smaller West African markets. Conversely, the sale of MTN Guinea-Conakry resulted in a $75 million loss. The company aims to focus on larger, more profitable markets moving forward.

MTN Group, the largest telecommunications operator in Africa, recently reported a gain of R287 million (approximately $15.8 million) from the sale of its Guinea-Bissau subsidiary to Telecel. This divestment is part of MTN’s strategy to withdraw from smaller markets in West and Central Africa (WECA) and focus on more substantial and lucrative markets. Notably, these smaller markets generated only 7.3% of the group’s revenue in 2023.

In October 2023, MTN accepted a binding offer from Telecel for the acquisitions of both MTN Guinea-Bissau and MTN Guinea-Conakry, with each entity valued at a nominal consideration of $1. The sale agreement was concluded on December 15, 2023, following MTN’s classification of both businesses as held for sale on December 31, 2023.

Although the sale of Guinea-Bissau resulted in a gain, the divestment of MTN Guinea-Conakry to the Guinean government led to a significant loss. According to MTN Group’s 2024 financial results, R1 370 million (around $75 million) in accumulated foreign currency translation reserves (FCTR) was reclassified to profit and loss as a result of this transaction. MTN clarified that due to the net liability position during the classification of held for sale, there was no additional impairment in asset measurement.

Financial difficulties beset MTN Guinea-Bissau, which reported a loan default of R171 million (about $9.4 million) and became insolvent by December 2023, with its liabilities surpassing its assets. Moving forward, MTN plans to focus its efforts on more critical West African markets, including Ghana, Cameroon, and Côte d’Ivoire, which together accounted for 19% of the company’s revenue in 2023.

In summary, MTN Group successfully divested its Guinea-Bissau subsidiary, realizing a profit of $15.8 million. However, the sale of MTN Guinea-Conakry resulted in substantial losses. This strategic move aligns with MTN’s objective to concentrate on more profitable markets in West Africa, shifting away from smaller, less impactful regions that have hindered financial performance.

Original Source: thecondia.com