MTN Group reported a revenue decline attributed to challenges in Nigeria and Sudan. Group service revenue decreased by 15.4% while EBITDA fell by 33.5%, amid fluctuating foreign currency rates and geopolitical instability. Nevertheless, the firm saw a subscriber increase and growth in data services, along with strategic portfolio optimization efforts and a declared dividend.
The MTN Group has experienced a decrease in revenue, primarily attributed to challenges encountered in Nigeria and Sudan, as indicated in the recently released annual financial results for the year ended December 31. The mobile operator reported a 15.4% decline in group service revenue to R177.8 billion, despite a rise in constant currency, excluding MTN Sudan.
Data revenue also suffered a decrease of 12.3% on a reported basis, although it increased by 21.9% in constant currency. Conversely, the fintech segment recorded an 11% growth. EBITDA fell by 33.5%, and the EBITDA margin decreased by 8.9 percentage points, signaling significant pressure on profitability. Basic earnings per share plunged to -531 cents, highlighting the financial repercussions of the devaluation of the naira and regional conflicts.
In the first half of 2024, MTN faced a revenue drop of 20.8%, amounting to R85.3 billion, though total subscribers grew by 2.2% to reach 290.9 million. Active data subscribers rose by 7.7% to 157.8 million, with mobile money monthly active users also increasing slightly. Notably, data traffic surged by 32.6%, indicating persistent demand for data services despite the overall revenue strain.
Ralph Mupita, MTN Group President and CEO, expressed satisfaction with the underlying performance and strategic execution for FY 2024. He acknowledged the macro-economic challenges yet highlighted improvements in key indicators that positively influenced results in the second half of the year. The company’s strategic focus on operational performance and capital investment aims to capture demand for data and fintech services.
Despite the adverse impacts of currency devaluation and conflict, Mupita stated that MTN maintained operational momentum and made significant network upgrades with R29.9 billion allocated for capital expenditure to enhance service quality. The CEO also noted a successful subscriber expansion, particularly excluding conflict-affected regions.
Regarding portfolio optimization, MTN completed the sale of its Afghanistan operation and is in the process of divesting from other markets to focus on strategic priorities. Structural initiatives in Nigeria have yielded significant operational savings, enabling the company to navigate the challenging economic landscape more effectively.
MTN Group’s board declared a dividend per share of 345 cents for FY 2024, with expectations set for a minimum dividend of 370 cents for FY 2025, signaling confidence in future performance despite current challenges.
In summary, MTN Group’s financial results reflect a notable decline in revenue primarily due to the economic challenges in Nigeria and ongoing conflict in Sudan. Despite these adversities, the company exhibited growth in its subscriber base and data services. The strategic initiatives and focus on operational efficiency, as well as the declared dividends for shareholders, suggest MTN’s resilience and commitment to navigating a challenging market environment effectively.
Original Source: www.itweb.co.za
