Huge loss for MTN

MTN has recorded a substantial loss following the devaluation of the Nigerian Naira.

In the first six months of 2024 (H1 2024), the group’s service revenue (in rand terms) dropped by 20% from R107 billion to R85 billion.

On a more positive constant currency basis, group service revenue increased by 12.1%.

Service revenue in South Africa grew by 3.3% to R21 billion. However, Nigeria’s service revenue decreased by 52.9% from R43 billion in H1 2023 to R20.5 billion.

Considering that Nigeria is MTN’s largest market, the devaluation of Nigerian naira has significantly impacted the group’s results.

Thus, the group recorded a basic loss per share of 409 cents—a 278% drop from the basic earnings of +229 cents per share in the prior period.

The group’s headline earnings per share also declined by 198.5% to a headline loss of 256 cents per share.

Amidst the drop, the group still did not declare an interim dividend for the period.

The group’s subscriber base increased by a slight 0.8% over the period to 288 million.

“Our subscriber base ended the period at 288 million with headwinds from subscriber registration regulations in markets such as Ghana and Nigeria, the decline in subscribers in Sudan amidst the ongoing conflict and our exit from Afghanistan,” said the group.

The group’s financials for H1 2023 can be found below:

Outlook

“Notwithstanding the prevailing macroeconomic and geopolitical conditions affecting our trading environment and business, we remain resolute in executing on our commercial and strategic priorities,” said the group.

“We are working to accelerate expense efficiencies to help manage the prevailing macro headwinds, in terms of which we continue to target R7-8 billion in cost savings over the next three years.”

The group completed its network resilience plan during H1, which it said will provide a strong foundation for MTN SA’s growth amid macroeconomic headwinds that strain consumer spending.

“This is also driving the ongoing evolution in customer behaviour to optimise consumption of bundles. Notwithstanding, we will continue the work to accelerate topline and deliver a healthy EBITDA, PAT and cash flow profile.”

MTN Nigeria will attempt to restore its profitability and balance sheet profile, especially by resolving its negative equity position. The group is also engaging with the relevant authorities regarding tariff increases, which it said are critical to the industry’s recovery and sustainability.

The group added that it is making good progress in the commercial roll-out of its card issuance and acceptance as per its partnership with Mastercard, where the card services company made a minority investment of $200 million into MTN’s financial technology business.

The group is prioritising seven markets in its card issuance roadmap and four markets for card acceptance during 2024.

“We maintain our overall medium-term guidance framework, with capex for FY 2024 anticipated to be
in the R28-33 billion range,” said the group.

“We will continue on the execution of our Ambition 2025 strategy to drive growth and unlock value for all our stakeholders over the medium term. The Board anticipates paying a minimum ordinary final dividend of 330 cents per share for FY 2024. “

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