MTN Group, the South African telecommunications giant, has experienced a substantial financial setback, recording its first loss in eight years. The company disclosed a loss of R7.39 billion ($414.7 million) for the first half of 2024, a sharp downturn from the R4.14 billion ($232.3 million) profit reported in the corresponding period of the previous year.
A significant factor in this loss is the severe devaluation of the Nigerian naira, which has adversely affected MTN’s revenue from Nigeria, one of its most vital markets. The naira has seen a dramatic decline of over 70% against the US dollar since May 2023, in the wake of foreign-exchange reforms and other economic measures introduced by President Bola Tinubu, which were intended to stabilize Nigeria’s economy.
Nigeria is a key territory for MTN, with approximately 77 million subscribers, and it contributes about one-third of the company’s total earnings. The financial difficulties were compounded by operational hurdles in Sudan, where conflict has disrupted business activities.
This loss is particularly noteworthy as it represents MTN’s first negative financial report since 2016, a year that also saw the Nigerian government impose a hefty fine of more than $1.5 billion on the company for failing to comply with regulatory requirements, a figure that was reduced from an initial $5.2 billion (₦1.04 trillion at the time).
Despite facing economic headwinds, MTN South Africa has shown commendable performance, reflecting its ability to navigate through tough market conditions. During the same half-year period, MTN South Africa experienced a service revenue growth of 3.3%, driven by a surge in its fintech operations and corporate sales.
Ralph Mupita, the CEO of MTN Group, remarked on the subsidiary’s positive performance, stating, “MTN South Africa has executed its network resilience strategy effectively, making significant strides in crucial segments of the business, which in turn has spurred a boost in our overall service revenue.”
The company also reported a 3.8% rise in earnings before interest, tax, depreciation, and amortisation (EBITDA), with the EBITDA margin widening to 36.6%, an increase of 0.4 percentage points compared to the previous year. Additionally, the customer base of MTN South Africa expanded by 4.7%, totaling 38.5 million subscribers by the end of June.
In particular, the number of post-paid subscribers surged by 9.2%, reaching a new total of 9.4 million. This growth is attributed to the rising demand for bundled voice and data packages, as well as home broadband services. Meanwhile, the prepaid customer segment also saw an increase, with subscriber numbers climbing by 3.3% to reach 29 million.
