The MTN Group observed a significant revenue decline attributed to pressures in Nigeria and Sudan. Annual financial results revealed a 15.4% drop in service revenue, with challenges rooted in currency devaluation and geopolitical volatility. Despite these challenges, subscriber growth occurred, and strategic initiatives in operational efficiency were emphasized by CEO Ralph Mupita, accounting for an overall nuanced financial landscape.
The MTN Group has reported a notable decline in financial performance, attributing this downturn to significant challenges encountered in Nigeria and Sudan. The announcement of its annual financial results for the year ending December 31, indicates a group service revenue reduction of 15.4% to R177.8 billion on a reported basis, although it demonstrated a 13.8% increase in constant currency, and a 14.4% rise when excluding MTN Sudan.
Furthermore, reported data revenue experienced a decrease of 12.3%, yet it increased by 21.9% in constant currency, with fintech revenue rising by 11%. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) decreased by 33.5%, resulting in a decrease in the EBITDA margin by 8.9 percentage points. Basic earnings per share reported a significant loss of -531 cents, with headline EPS plunging by 68.9% to 98 cents.
In the first half of 2024, MTN’s revenue continued to decline by 20.8% to R85.3 billion compared to R107.7 billion in the same period of 2023. Despite these challenges, total subscribers rose by 2.2% to reach 290.9 million, with a 7.7% increase in active data subscribers to 157.8 million, and monthly active users of Mobile Money (MoMo) also saw a marginal rise. Furthermore, data traffic surged by 32.6% to 19,459 petabytes.
MTN Group President and CEO Ralph Mupita indicated, “We are pleased to report a strong underlying performance and strategic execution for FY 2024, despite challenges in the operating environment.” He emphasized that the results were buoyed by stable macroeconomic indicators in certain key markets and improvements in earnings and free cash flow during the latter half of the year.
Mupita also acknowledged that the devaluation of the Nigerian naira and heightened inflation negatively impacted operations. The ongoing conflict in Sudan further compounded the operational and financial challenges faced by MTN. The company invested R29.9 billion to enhance network quality and capacity, aiming to capitalize on the growing demand for data and fintech services.
As part of its portfolio optimization, MTN completed the sale of its operations in Afghanistan and is set to enhance its risk profile by exiting additional markets, including those in Guinea. In Nigeria, the firm renegotiated tower lease contracts, achieving operational savings of R1.3 billion in FY 2024. Additionally, MTN has declared a dividend of 345 cents per share for FY 2024, with an anticipated increase for FY 2025.
The MTN Group’s recent financial results reflect a challenging landscape shaped by currency devaluation and conflict in Nigeria and Sudan. Although reported revenues declined, there has been a commendable increase in subscriber numbers and operational efficiencies. Moving forward, strategic optimizations and continued investment in market resilience will be paramount as MTN seeks to enhance its profitability and shareholder value amid ongoing economic pressures.
Original Source: www.itweb.co.za
