MTN Group reported a revenue decline due to challenges in Nigeria and Sudan, with service revenue decreasing by 15.4% on a reported basis. Despite these challenges, subscriber growth was noted, and the company remains optimistic owing to strategic measures like tariff changes and portfolio optimization. The board announced a dividend of 345 cents per share for FY 2024, projecting a minimum of 370 cents for FY 2025.
The MTN Group has reported a notable decline in its revenue, primarily attributed to difficulties in Nigeria and Sudan. The company announced its financial results for the year ending December 31, highlighting that the foreign exchange devaluation of the Nigerian naira and the ongoing conflict in Sudan significantly impacted its performance. Overall, group service revenue fell by 15.4% to R177.8 billion, although there was a 13.8% increase in constant currency, rising to 14.4% when excluding MTN Sudan.
Additionally, data revenue decreased by 12.3% on a reported basis but grew by 21.9% in constant currency terms. In contrast, MTN’s fintech revenue saw an increase of 11%. The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropped by 33.5%, leading to a decreased EBITDA margin by 8.9 percentage points. Consequently, basic earnings per share decreased to a loss of -531 cents, while reported headline earnings per share fell 68.9% to 98 cents.
In the first half of 2024, MTN experienced a revenue decline of 20.8% to R85.3 billion, down from R107.7 billion in the same period of 2023. Despite these challenges, MTN reported an increase in total subscribers by 2.2% to 290.9 million, with active data subscribers rising by 7.7% to 157.8 million. Furthermore, monthly active users of Mobile Money (MoMo) grew slightly by 0.9% to 63.1 million, while data traffic surged by 32.6% to 19,459 petabytes.
MTN Group President and CEO Ralph Mupita expressed satisfaction regarding the company’s underlying performance and strategic execution during FY 2024. He noted the stabilization of macro-economic indicators, such as inflation and foreign exchange rates, in certain markets supported their results. The company’s boost in performance is also attributed to the approval of tariff changes in Nigeria, which are currently being implemented, positioning MTN to continue on a positive trajectory.
Mupita emphasized that despite facing macroeconomic adversity and conflicts, the company maintained operational momentum and made significant investments to enhance network quality and capacity. MTN deployed R29.9 billion in capital expenditures to leverage the expansion of data and fintech services, achieving robust growth in data traffic and transaction volumes.
Furthermore, MTN is optimizing its portfolio, having finalized the sale of MTN Afghanistan and initiated exits from consolidated Middle East operations, including MTN Guinea-Bissau and MTN Guinea-Conakry. In August 2024, it renegotiated tower lease contracts in Nigeria, resulting in cost-saving benefits and improving operational efficiency. The board also declared a dividend per share of 345 cents for FY 2024, with expectations of a minimum ordinary dividend of 370 cents for FY 2025.
In summary, MTN Group faced significant challenges in FY 2024 due to external economic factors and geopolitical tensions, particularly in Nigeria and Sudan. Despite a decline in revenue, operational resilience was evident with subscriber growth and increased data usage. The company undertook strategic measures such as cost optimization and portfolio adjustments to bolster its position. Positive indicators suggest potential earnings improvement, with a committed approach to navigating the market complexities ahead.
Original Source: www.itweb.co.za
