MTN Nigeria has lost its title as the highest-earning subsidiary of MTN Group after reporting a loss of ₦400.4 billion in 2024. This shift follows difficulties in revenue generation attributed to economic challenges, placing it behind South Africa and the WECA region in revenue rankings. The situation may impact future investments and operations in Nigeria.
MTN Nigeria has lost its status as the highest-earning subsidiary in the MTN Group for the first time since 2019, reporting a post-tax loss of ₦400.4 billion ($260.2 million) in 2024. This shift places MTN Nigeria behind the West and Central Africa (WECA) region and South Africa in revenue rankings, marking a notable change in the company’s financial landscape.
Historically, MTN Nigeria contributed around 40% of the Group’s total revenue, but faced challenges in 2024 due to a depreciating naira and rising inflation, which severely impacted earnings. The unit, which commands 51% of Nigeria’s subscriber base, earned $2.26 billion in 2024, a decrease from $4 billion in 2023.
Despite a 36% rise in revenue to ₦3.36 trillion in 2024 (compared to ₦2.47 trillion in 2023), foreign exchange losses led to MTN Nigeria’s financial downturn. In contrast, MTN South Africa reported earnings of $2.89 billion, overtaking Nigeria and becoming the second-largest subsidiary by revenue, while the WECA region led with $3.1 billion, with Ghana being the main contributor, as stated by MTN Group CEO Ralph Mupita.
The financial difficulties faced by MTN Nigeria might affect the Group’s future investments in this key market. While MTN Nigeria remains a significant recipient of funds for network expansion and 5G deployments, further declines in revenue could jeopardize these allocations, potentially impacting the company’s growth trajectory and service quality.
MTN Nigeria’s growth story began when it surpassed South Africa as the Group’s top revenue service in 2013. During this period, Nigeria generated $2.6 billion, compared to South Africa’s $2.1 billion. Although it maintained its lead until 2017, the company faced challenges in the form of a $5.2 billion fine which altered its financial standing. MTN regained its position in 2019 but saw a decline again in 2024.
In light of the financial losses in 2024, MTN Group has suspended revenue guidance for Nigeria, an estimate of future earnings. However, after the Nigerian Communications Commission (NCC) approved tariff hikes, the company has reinstated its revenue forecast. In the words of CEO Ralph Mupita, “We saw inflation ease towards the end of 2024, which gives us confidence.”
As of December 31, 2024, MTN Group operates in 16 countries across Africa and the Middle East, serving approximately 291 million customers. The company has streamlined its operations, focusing primarily on its core African market and organizing 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). MTN Nigeria’s future performance hinges on the stabilization of the naira, inflation reduction, and recovery in consumer spending.
In conclusion, MTN Nigeria has experienced a significant financial setback, losing its top revenue position within the MTN Group for the first time since 2019. Contributing factors include foreign exchange losses and economic conditions in Nigeria. The Group’s future investments may be affected, depending on MTN Nigeria’s performance and broader economic improvements.
Original Source: techcabal.com
