The MTN Group has reported a decline in revenue, citing challenges in Nigeria and Sudan as the biggest reasons for the dip.
Africa’s largest mobile operator by subscribers today announced its annual financial results for the period ended 31 December.
According to MTN, the financial results were impacted by foreign exchange devaluation, particularly the Nigerian naira, as well as the conflict in Sudan.
Group service revenue decreased by 15.4% on a reported basis to R177.8 billion, but increased by 13.8% in constant currency (up 14.4% excluding MTN Sudan), the mobile operator says.
Data revenue decreased by 12.3% on a reported basis, but increased by 21.9% in constant currency, it notes, adding that fintech revenue increased by 11%.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased by 33.5%, and EBITDA margin decreased by 8.9 percentage points.
MTN reveals that basic earnings per share decreased by more than 100% to a loss of -531 cents, while reported headline EPS decreased by 68.9% to 98 cents.
During the first half (H1) of 2024, MTN suffered a revenue decline of 20.8% to R85.3 billion (H1 2023: R107.7 billion).
The firm notes that total subscribers increased by 2.2% to 290.9 million and active data subscribers increased by 7.7% to 157.8 million.
Mobile Money (MoMo) monthly active users (MAU) increased by 0.9% to 63.1 million, with data traffic increasing by 32.6% to 19 459 petabytes.
According to the telco, fintech transaction volumes increased by 15.3% to 20.3 billion.
Steady strategy
MTN Group president and CEO Ralph Mupita says: “We are pleased to report a strong underlying performance and strategic execution for FY 2024, despite challenges in the operating environment.
“We are encouraged by the relative stability of some important key macro-economic indicators in H2 – such as inflation and foreign exchange rates in certain of our key markets. This provided support to our results in the period, with a pleasingly positive momentum in H2 earnings, free cash flow and leverage ratio.”
Mupita points out that these outcomes were underpinned by strong operational performances in several key markets.
He adds that the FY 2024 result – further boosted by the approval of tariff amendments in Nigeria in the new year, and which are presently being implemented – enabled the firm to exit the year on a strong footing to sustain the encouraging momentum going forward.
“Despite the challenges in our macro and trading environments, we sustained the operational momentum of our business, as well as progressed several of our key strategic priorities. Our operating context was characterised by sharp devaluation of the naira, along with elevated inflation in some markets,” says Mupita.
“There remained volatility in the geopolitical landscape, which had knock-on effects on our business. In Sudan, the ongoing conflict in the country negatively impacted our operational and financial performance.”
Against this backdrop, he notes the company deployed R29.9 billion of capex (excluding leases) to strengthen the quality and capacity of its networks.
“Alongside execution of our commercial strategies, our continued investment enabled us to capture the ongoing structural demand for, and expansion in, our data and fintech services. In this regard, we were encouraged by the persistent robust growth in data traffic, up by 32.6% − 37.3% excluding joint ventures (JVs), and fintech transaction volumes (up 15.3%),” Mupita says.
“We ended FY 2024 with a subscriber base of 291 million, excluding the markets we exited in the year. This represented net additions of 6.2 million customers amid ongoing SIM registration regulations in some markets, as well as the decline in conflict-affected MTN Sudan subscribers. Excluding Sudan, underlying net additions were 9.4 million.”
Active data subscribers were up 7.7% to 157.8 million (up 8.2%, excluding JVs), while MoMo MAU increased by 0.9% to 63.1 million, the CEO explains.
He adds that growth in MoMo MAU slowed due to initiatives in key fintech markets implemented to enhance the quality, stickiness and profitability of the firm’s overall ecosystem.
Moving forward
With regards to MTN’s portfolio optimisation priorities, it finalised the sale of MTN Afghanistan in February 2024, which completed its exit of the consolidated Middle East operations.
“We announced conclusions of the sales of MTN Guinea-Bissau and MTN Guinea-Conakry in August 2024 and December 2024, respectively – further enhancing the focus and risk profile of our portfolio.”
In August 2024, the firm successfully renegotiated the tower lease contracts in Nigeria, which incorporate more sustainable terms that enable MTN Nigeria to better manage impacts of the macro-economic environment on the business, says Mupita.
“This was a significant milestone in our efficiency initiatives, resulting in R1.3 billion in opex savings benefits to MTN Nigeria in FY 2024.
“We exceeded the regulatory requirement of 25% localisation for MTN Ghana in H1, with its local ownership now at 30%. We also successfully executed the further sell-down of 7% of MTN Uganda, achieving compliance with local listing requirements of a minimum public float of 20%.”
The MTN Group board has declared a dividend per share of 345 cents for FY 2024. For FY 2025, the board anticipates paying a minimum ordinary dividend per share of 370 cents after the announcement of full year results expected in March 2026.
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