MTN Group’s profits have been adversely affected by the devaluation of the Nigerian naira and ongoing conflicts in Sudan, leading to a 69% drop in headline earnings per share. Despite these challenges, CEO Ralph Mupita remains optimistic about Nigeria’s recovery and the company’s long-term growth potential, supported by successful initiatives in South Africa and improvements in network performance.
MTN Group has faced challenges due to the devaluation of the Nigerian naira and ongoing conflict in Sudan, negatively impacting its profits for the fiscal year ending December 31, 2024. The company reported a significant 69% year-over-year decrease in headline earnings per share (HEPS), though constant currency performance showed a 13.8% increase. CEO Ralph Mupita remains optimistic about the group’s strong operational performance despite these adverse conditions.
The macroeconomic environment has been tough, particularly in Nigeria, where the naira’s sharp devaluation has obscured underlying business resilience. Mupita indicated a sense of cautious optimism as early signs emerged of currency stabilization and diminishing inflation. The Group is implementing various initiatives, such as renegotiating contracts and raising mobile tariffs, to enhance profitability in Nigeria.
MTN’s revenue also suffered from the ongoing crisis in Sudan, which has led to operational disruptions and a significant drop in network availability. However, positive developments are occurring, as some network sites have been reactivated in Khartoum. MTN is actively working on strategies to mitigate these challenges and improve its operational efficiency.
While the overall service revenue for MTN fell by 15.4%, its South African operations showed positive growth. Service revenue increased by 3.1% in South Africa, thanks to improved network performance and successful commercial strategies. This regional success highlights the diversified performance of MTN within its operating markets, despite the significant declines in Nigeria and Sudan.
The Group’s EBITDA decreased significantly; however, there is potential for recovery if currency conditions stabilize. MTN has committed substantial capital expenditure to enhance network quality and capacity, underpinning its long-term growth strategy. The Board of Directors has also announced plans to increase dividends in the upcoming financial year, signaling confidence in recovery.
The subscriber base for MTN rose by 2.2% to 290.9 million. Despite declines in conflict-affected regions like Sudan, the company saw robust growth in data traffic and fintech transactions. These growth metrics underscore MTN’s potential to rebound, bolstered by a strategic focus on key markets and operational improvements.
MTN is also optimizing its portfolio by divesting from underperforming operations, including the sale of its Middle Eastern assets and the exit from smaller markets in West Africa. Mupita expressed cautious optimism regarding macroeconomic conditions, noting potential growth opportunities across its markets. The Group is committed to achieving sustainable growth and enhancing stakeholder value.
In conclusion, MTN Group continues to navigate significant challenges stemming from currency devaluation and geopolitical conflicts, particularly in Nigeria and Sudan. However, the company has displayed resilience through strategic initiatives and positive growth trends in its South African operations. The focus on network enhancement and financial stability positions MTN strongly for future recovery and growth, as optimistic signs emerge from its key markets.
Original Source: www.connectingafrica.com
