The news:
- MTN Group, the South African-owned multinational corporation and mobile telecom provider, has reported a significant financial downturn, marking its first loss since 2016.
- The group announced a loss of R7.39 billion ($414.7 million) for the six months ending in June 2024, a stark contrast to the R4.14 billion ($232.3 million) profit recorded during the same period last year.
- This loss is largely attributed to the sharp devaluation of the Nigerian naira, which has significantly impacted the company’s earnings from one of its most critical markets.
Since May 2023, the naira has depreciated by over 70% against the US dollar, following President Bola Tinubu's implementation of foreign-exchange reforms and other economic policies aimed at stabilising the Nigerian economy.
Nigeria, where MTN has about 77 million customers, has traditionally been an economic stronghold for the telecom operator, accounting for roughly one-third of its overall earnings.
In addition to the currency devaluation in the Western African nation, operational challenges in Sudan due to ongoing conflict further exacerbated the group’s financial slump.
The loss is particularly significant as it marks the first time MTN has reported a negative result since 2016 — the same year the Nigerian government fined the company more than $1.5 billion for regulatory violations, negotiated from the initial fine of $5.2 billion (₦1.04 trillion at the time).
Despite these setbacks, MTN South Africa has managed to deliver a robust performance, showcasing resilience in the face of a challenging economic environment.
In the same six-month period, MTN South Africa reported a 3.3% increase in service revenue, buoyed by strong growth in its fintech business and enterprise sales.
Commenting on MTN South Africa’s positive result, Ralph Mupita, MTN Group CEO, said, “MTN South Africa, which completed its network resilience plan in the period, demonstrated encouraging progress in key areas of the business. This helped to drive some acceleration in overall service revenue.”
The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) also saw a 3.8% increase, with an EBITDA margin expanding to 36.6% — up by 0.4% points year on year.
Furthermore, MTN South Africa’s subscriber base grew by 4.7%, reaching 38.5 million by the end of June.
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Specifically, post-paid subscribers increased by up to 9.2%, bringing the new total to 9.4 million, driven by the growing popularity of integrated voice and data plans as well as home broadband services. Prepaid subscribers reached 29 million, marking a 3.3% rise.
