MTN Nigeria has lost its status as MTN Group’s highest-earning subsidiary for the first time since 2019, reporting a significant post-tax loss in 2024. The weakened naira and inflation have impacted earnings significantly, with South Africa and the WECA region now surpassing Nigeria in revenue. Future investments may be jeopardized as further revenue declines could affect growth and service quality.
MTN Nigeria has experienced a significant shift, losing its status as the highest-earning subsidiary of the MTN Group for the first time since 2019. In 2024, the Nigerian unit reported a post-tax loss of ₦400.4 billion ($260.2 million), placing it behind the WECA region and South Africa in revenue rankings, thereby altering the Group’s revenue dynamics substantially.
This telecom giant, which has historically contributed around 40% of the Group’s total revenue, faced challenges due to a weakened naira and rising inflation that impacted earnings. In 2024, it generated $2.26 billion, a decline from $4 billion in 2023, despite the revenue increase of 36% to ₦3.36 trillion, primarily due to foreign exchange losses affecting the bottom line.
MTN South Africa has surpassed Nigeria in earnings, reporting $2.89 billion. The WECA region led with revenue of $3.1 billion, with Ghana identified as a major contributor. This shift reveals an ongoing trend that may influence MTN Group’s investment strategies moving forward.
The financial challenges for MTN Nigeria could affect future investments in its primary African market, as the Group tends to allocate capital expenditure to its most profitable subsidiaries. In 2024, MTN Nigeria received about $986.2 million for network expansions and 5G rollouts, yet continuous revenue declines could threaten these vital allocations, hindering future growth.
Historically, South Africa maintained dominance within the Group until Nigeria surpassed it in 2013, generating $2.6 billion compared to South Africa’s $2.1 billion. Although Nigeria reclaimed the top position in 2019, the recent revenue decline suggests a potential return to previous revenue dynamics.
Following the financial losses recorded in 2024, MTN Group suspended Nigeria’s revenue guidance. The Nigerian Communications Commission’s approval of tariff increases has led the company to reinstate its revenue outlook, offering some optimism for future earnings. CEO Ralph Mupita expressed cautious positivity regarding inflation trends during a recent investor call.
As of December 31, 2024, MTN Group operates in 16 countries, serving a customer base of 291 million. In recent years, the company has streamlined operations, exiting less profitable markets to concentrate on Africa. MTN now organizes its operations into five regional clusters, ensuring a focused approach. The forthcoming performance of MTN Nigeria will largely hinge on the stability of the naira, a reduction in inflation, and a revival in consumer spending power.
The financial landscape for MTN Nigeria has notably shifted, as it has lost its top revenue position for the first time in over four years. Compounded by challenges such as inflation and foreign exchange losses, the company reported significant losses in 2024. As MTN Group re-evaluates its future investments, the ongoing performance of MTN Nigeria will be crucially dependent on economic stabilization and market recovery in the region.
Original Source: techcabal.com
