MTN Group’s profits plummet due to Nigerian naira devaluation and conflicts in Sudan, with HEPS dropping 69% YoY. Despite challenges, the CEO remains optimistic about recovery efforts in Nigeria and stable growth in South Africa. Strategic initiatives and ongoing investments aim to enhance operations and profitability moving forward.
MTN Group reported a significant decline in profits, driven largely by the devaluation of the Nigerian naira and ongoing conflicts in Sudan. The company’s headline earnings per share (HEPS) for the fiscal year ending December 31, 2024, dropped almost 69% year-over-year. However, it is important to note that in constant currency terms, HEPS would have improved by 13.8%. MTN Group President and CEO Ralph Mupita expressed optimism regarding the group’s overall strong performance amid these challenging conditions.
Mupita noted that the naira’s devaluation has influenced the group’s financial outcomes but concealed positive performance indicators. He articulated the company’s commitment to growth in Nigeria, referencing initial signs of stabilization in the naira and inflation reduction. MTN has initiated several strategies, such as renegotiating tower lease contracts that resulted in approximately $71.6 million in operational savings and raising mobile prices due to a recent tariff increase approval.
The protracted conflict in Sudan has compounded MTN’s challenges, severely affecting its operations due to power shortages and network disruptions. Mupita mentioned that network availability was significantly hampered, yet there have been some improvements as of late 2024, with certain sites in Khartoum being operational again.
Despite these obstacles, MTN’s South African market demonstrated resilience, with service revenue rising by 3.1% to $2.4 billion. Notably, the South African government’s upcoming removal of excise duty on affordable smartphones was described by Mupita as a constructive move that could enhance mobile accessibility and spur growth.
MTN’s group earnings before interest, tax, depreciation, and amortization (EBITDA) fell by one-third over the year to $3.3 billion, yet would have shown an upward trajectory under stable currency conditions. The EBITDA margin also declined significantly. Despite these financial hurdles, MTN allocated $1.65 billion towards capital expenditure to improve its network capabilities and plans to invest further in the coming fiscal year.
In summary, MTN Group continues to navigate significant challenges stemming from external economic pressures and geopolitical instability. Although profitability has been adversely affected, particularly in Nigeria and Sudan, the company is adopting strategic measures to facilitate recovery and growth. Optimistic trends in its core markets and a focus on enhancing service and network operations suggest potential for future stabilization and profitability. MTN’s commitment to investment and adaptation may bolster its position in the competitive telecommunications landscape.
Original Source: www.connectingafrica.com
