MTN Group incurred financial setbacks due to the devaluation of the Nigerian naira and ongoing conflicts in Sudan, resulting in a nearly 69% decline in HEPS. Despite these challenges, the CEO expressed confidence in Nigeria’s recovery, highlighting initiatives aimed at profit restoration. South Africa showed resilience with growth in service revenue, while MTN also optimized its portfolio by exiting underperforming markets. Overall, the company is cautiously optimistic about future prospects.
MTN Group has reported significant financial challenges, primarily due to the devaluation of the Nigerian naira and the conflict in Sudan, which negatively impacted their profits over the last financial year. The company saw a sharp decline in its headline earnings per share (HEPS), dropping nearly 69% year-over-year. However, in constant currency terms, this figure would have reflected a 13.8% increase, indicating that currency fluctuations masked the underlying growth potential.
Despite these challenges, MTN Group’s President and CEO Ralph Mupita expressed optimism regarding their overall performance and strategic execution amidst difficult macroeconomic conditions. He noted that the volatile geopolitical landscape and inflationary pressures in some markets had direct repercussions on their operations, particularly in Nigeria and Sudan, where ongoing conflicts have hampered productivity and profitability.
Looking forward, Mupita highlighted a potential recovery in Nigeria, citing early signs of naira stabilization and declining inflation. He reported that MTN had initiated various strategies, such as renegotiating tower lease contracts, resulting in significant operational savings. Furthermore, a recent approval for a tariff increase is expected to boost revenue growth in the region.
The ongoing turmoil in Sudan has had a substantial negative effect on MTN’s operations, with reports of power outages and fuel shortages disrupting service. However, Mupita mentioned improvements in network operations since mid-December 2024, and some sites have already resumed functionality.
In contrast to the struggles in Nigeria and Sudan, MTN’s South African operations showed resilience, with service revenue increasing by 3.1% to R43.2 billion ($2.4 billion) year-over-year. Improved network availability and commercial strategies were credited for this positive performance. Additionally, a new government plan to eliminate excise duties on affordable smartphones is expected to promote digital inclusion and spur growth in the sector.
MTN’s overall group service revenue fell by 15.4% to R177.8 billion ($9.8 billion) due to a significant drop in their Nigerian market. However, the company managed to grow its subscriber base by 2.2% year-over-year, reaching a total of 290.9 million across 16 markets, despite operational challenges in Sudan affecting overall growth metrics.
Additionally, MTN has been optimizing its portfolio by exiting underperforming markets. The sale of its businesses in Afghanistan and other regions reflects a strategic pivot to focus on more profitable operations. Looking ahead, while uncertainties remain, Mupita is optimistic about potential growth as inflation stabilizes and market conditions improve, indicating a strong foundation for future development.
In conclusion, MTN Group faces significant pressures from currency devaluation and geopolitical conflicts impacting profits and operations in Nigeria and Sudan. However, the company’s leadership remains optimistic about recovery prospects in Nigeria due to early signs of economic stabilization. Meanwhile, positive developments in South Africa highlight the company’s resilient segments. MTN’s strategic initiatives, including portfolio optimization, suggest a commitment to adapt and thrive despite external challenges, positioning the group for future growth.
Original Source: www.connectingafrica.com
