MTN Group, Africa’s telecommunications giant, has unveiled its 2024 financial results, revealing a complex picture of robust operational growth marred by significant currency devaluation in Nigeria and conflict-related impairments in Sudan. However, the company’s bold move to implement tariff adjustments in Nigeria, effective February 2025, signals a clear focus on aggressive growth and future profitability, even amidst challenging economic headwinds.
While the group’s reported rand figures paint a grim picture – with service revenue down 15% and EBITDA plummeting by a third – the underlying performance, measured in constant currency, reveals a different story. Service revenue surged by 14%, and fintech services witnessed a remarkable 28.5% increase, highlighting the company’s strong operational foundation.
The primary culprit for the stark disparity between constant currency and reported figures is the dramatic devaluation of the Nigerian naira. This currency fluctuation significantly impacted MTN’s reported earnings, overshadowing the company’s strong performance in its largest market, Nigeria, where service revenue soared by 35.6%.
“The sharp devaluation of the naira has undoubtedly presented significant challenges,” acknowledged Ralph Mupita, MTN Group President and CEO. “However, the underlying strength of our operations, particularly in Nigeria and South Africa, remains robust.”
Also Read: MTN Spends $2 Billion on Network Infrastructure – Mupita
The company’s strategic response to the Nigerian economic landscape is a key takeaway. The recently implemented tariff adjustments are expected to bolster MTN Nigeria’s revenue stream, with the company reinstating its medium-term guidance. This aggressive move underscores MTN’s confidence in its ability to navigate the volatile economic climate and capitalize on its market leadership.
Furthermore, MTN’s fintech division continues to be a major growth driver. The 35% increase in transaction value, reaching a staggering US$321 billion, and the 52% surge in advanced fintech services revenue highlight the company’s successful diversification and expansion into digital financial services.
Despite the financial setbacks caused by currency woes and impairments, MTN has demonstrated resilience and strategic foresight. The company’s commitment to disciplined capital allocation and expense efficiencies, achieving R3.8 billion in savings in 2024, has helped mitigate the impact of external challenges.
Looking ahead, MTN’s board has signaled its confidence in the company’s future by increasing the dividend to 345 cents per share for 2024 and anticipating a minimum ordinary dividend of 370 cents per share for 2025. This move reflects the company’s positive outlook, driven by the anticipated benefits of the Nigerian tariff adjustments and the continued growth of its fintech division.
“While macroeconomic and geopolitical uncertainties persist, we are encouraged by the signs of abating inflation and reduced forex volatility,” Mupita stated. “The tariff adjustments in Nigeria, coupled with our strategic initiatives, position MTN for continued growth and value creation.”
MTN’s ability to navigate the complex economic landscape and its proactive approach to addressing challenges, particularly in Nigeria, highlight its strategic agility and commitment to long-term growth. The company’s focus on operational excellence, coupled with its aggressive growth strategy in key markets, positions it to capitalize on the opportunities presented by the evolving African telecommunications landscape.