MTN Group, the leading African mobile operator, today released its reviewed interim financial results for the first half of 2024, with local business unit, MTN Nigeria, recording strong performance.
MTN Group, which serves 288 million customers across 18 markets, reported growth in areas like fintech and data services, although these gains, the telecoms group says, were impaired by currency devaluations and geopolitical conflicts.
“MTN Nigeria,” Mupita says, “will press ahead with the initiatives outlined to restore its profitability and balance sheet profile, particularly in resolving its negative equity position. Tariff increases remain critical to the recovery and sustainability of the industry in Nigeria and sector engagements with the relevant authorities are ongoing.”
MTN Group: Key Financial Highlights
MTN Group’s service revenue decreased by 20.8% year-on-year, down to R85.3 billion, as opposed to H1 2023: R107.7 billion, impacted heavily by the devaluation of the Nigerian naira. However, in constant currency terms, service revenue saw a 12.1% growth.
Earnings before interest, tax, depreciation, and amortization (EBITDA) dropped by 41.2% to R29 billion, with an EBITDA margin of 32.0%, down from 43.6% in the previous year. The company attributed this decline to increased macroeconomic pressures and the weaker performance of the Nigerian market.
“Although the underlying commercial momentum and strategy execution were solid in the period, macro headwinds impacted operating results. The further devaluation in the naira against the US dollar, the translation impact on reporting currency (rands) of the naira and the ongoing conflict in Sudan had the most significant impact on reported results,” Ralph Mupita, MTN’s Group President and CEO says.
Basic earnings per share (EPS) saw a decline, dropping by 278.6% to -409 cents per share, while headline earnings per share (HEPS) fell by 198.5% to -256 cents per share.
Operational Performance
MTN’s operational performance saw their total subscribers increasing by 0.8% to 288 million. Active data subscribers grew by over 9% to 150 million, driving a 21% increase in data service revenue. The company also reported a 27% rise in fintech service revenue, which is attributed to a 9% increase in active Mobile Money (MoMo) users to 66 million.
“MTN Nigeria delivered a strong reported underlying performance, despite the severe macro impacts on its financial performance. The Opco made good progress in key initiatives in the period, including acceleration of its topline, optimisation of capex and reduction of its US dollar denominated obligations,” according to Mupita.
“Based on current assumptions for 2024 we anticipate that the renegotiated terms will result in a benefit to MTN Nigeria’s EBITDA margin of between 3-4pp for FY 2024; on an annualised basis, this approximates to 4-5pp,” commented Mupita on MTN Nigeria’s renegotiation of IHS leases. “In terms of cash flow effects, we estimate that the new terms will result in a benefit of between NGN75-85 billion for FY 2024. On an annualised basis, this approximates to NGN100-110 billion,” he adds.
Mupita further highlights the company’s progress in executing its Ambition 2025 strategy, noting the successful completion of key initiatives, including the local ownership increase in MTN Ghana and MTN Uganda and the orderly exit from operations in Afghanistan and Guinea-Bissau.
In terms of outlook and future plans, MTN says they remain resolute in executing their strategic priorities and maintaining its medium-term guidance. The company plans to accelerate expense efficiencies, targeting R7-8 billion in cost savings over the next three years.
“MTN Nigeria,” Mupita says, “will press ahead with the initiatives outlined to restore its profitability and balance sheet profile, particularly in resolving its negative equity position. Tariff increases remain critical to the recovery and sustainability of the industry in Nigeria and sector engagements with the relevant authorities are ongoing.”
Looking ahead, MTN anticipates paying a full-year dividend of 330 cents per share for FY2024. Mupita reaffirmed the Group’s commitment to driving growth and unlocking value for stakeholders, stating, “We will continue on the execution of our Ambition 2025 strategy to drive growth and unlock value for all stakeholders over the medium term.”
MTN also announced plans to extend its Broad-Based Black Economic Empowerment (B-BBEE) scheme, MTN Zakhele Futhi, by three years, demonstrating its ongoing commitment to transformation and creating shared value in South Africa.
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