MTN Nigeria has lost its title as the highest-earning subsidiary of the MTN Group due to a post-tax loss of ₦400.4 billion ($260.2 million) in 2024. The subsidiary fell behind South Africa and the WECA region in revenue rankings. Despite a revenue increase, foreign exchange losses drove it to a deficit. The situation may impact future investments and service quality as the company seeks to stabilize earnings.
MTN Nigeria has experienced a significant change, losing its status as the highest-earning subsidiary of the MTN Group for the first time since 2019. This shift is underscored by its reported post-tax loss of ₦400.4 billion ($260.2 million) in 2024, as the subsidiary fell behind both the West and Central Africa (WECA) region and South Africa in revenue rankings.
The telecom powerhouse, which previously contributed about 40% of the Group’s total revenue for five years, faced considerable challenges in 2024 due to a weakened naira and rising inflation, which dramatically impacted earnings. Despite retaining 51% of Nigeria’s subscriber base, MTN Nigeria’s revenue decreased to $2.26 billion in 2024, down from $4 billion in 2023.
While MTN Nigeria reported a 36% increase in revenue to ₦3.36 trillion in 2024, foreign exchange losses ultimately resulted in a significant deficit. MTN South Africa surpassed Nigeria, earning $2.89 billion and becoming the Group’s second-largest subsidiary by revenue. Additionally, the WECA region led with earnings of $3.1 billion, with Ghana as its principal contributor, as indicated by CEO Ralph Mupita.
The financial difficulties facing MTN Nigeria could influence the Group’s investment strategies in this key market. MTN Group has previously prioritized capital expenditure toward its most profitable subsidiaries. Despite receiving approximately $986.2 million in 2024 for network enhancements and 5G rollouts, continued revenue declines may threaten future funding and, in turn, the company’s ability to maintain growth and service quality.
Historically, South Africa was the dominant revenue generator for the Group until Nigeria took the lead in 2013. Nigeria held this position until 2017, when a substantial fine from the Nigerian government necessitated repayments. MTN Nigeria regained its leading position in 2019 but has once again fallen behind in 2024.
In light of these financial losses, MTN Group suspended Nigeria’s revenue guidance for future earnings. Nevertheless, after the Nigerian Communications Commission (NCC) approved tariff increases, the company has reinstated its revenue outlook. CEO Ralph Mupita expressed cautious optimism, stating, “We saw inflation ease towards the end of 2024, which gives us confidence. We have not yet completed the implementation of the tariff increases in Nigeria.”
As of December 31, 2024, MTN Group operates in 16 countries throughout Africa and the Middle East, serving 291 million customers. The company is refocusing its operations by exiting certain markets, like Afghanistan, to concentrate on its core African business. MTN has restructured 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).
The future performance of MTN Nigeria will hinge on stabilizing the naira, mitigating inflation pressures, and enhancing consumer purchasing power, which are critical for recovery.
In conclusion, MTN Nigeria has faced substantial challenges, resulting in its first loss of the top revenue position within the MTN Group since 2019. As the dynamics shift due to inflation and currency issues, the implications for future investments and growth are significant. While the company adapts to these challenges, strategic measures to stabilize performance will be essential for maintaining its market position.
Original Source: techcabal.com
