MTN reports losses hit by naira devaluation and war in Sudan

MTN reported a R9.6bn loss in the six months to June hit by a sharp devaluation of the naira against the US dollar and the conflict in Sudan.

Group service revenue decreased by 20.8% to R85.3bn, reported headline earnings per share decreased by 198.5% to a loss of 256cps. Loss after tax for the six months to June was R9.6bn from a profit of R4.4bn.

“The sharp devaluation of the naira took a shine off what was a strong underlying performance. We also had the ongoing conflict in Sudan which has affected our growth on voice and data. The situation in Sudan is challenging. It is a humanitarian issue of significance from our point of view and we have had about 50 days in the half-year where our network was not up at all,” MTN group president and CEO Ralph Mupita said during a media briefing. The group managed to get many of the network sites up and running. 

MTN’s group fintech revenue was up 27.7% to R10.9bn. Fintech includes MoMo (mobile money), which has 66-million customers, insurance, airtime lending and e-commerce. Fintech transaction volumes increased by 18% to 9.7bn. At the end of June 2024, MTN had 288-million subscribers in 18 markets. Of these, 150-million were active data subscribers — up more than 9%.

In South Africa, where MTN has 38.5-million subscribers, service revenue grew 3.3% to R21.1bn while Nigeria’s service revenue declined 52% to R20.5bn. MTN has 79.4-million subscribers in Nigeria, up 2.9%. South Africa and Nigeria are the operator's biggest markets. 

“MTN Nigeria delivered a strong underlying performance despite the severe macro impacts on its financial performance,” Mupita said, noting good progress in key initiatives including acceleration of revenue, optimisation of capex and the reduction of its US dollar-denominated obligations.

MTN Nigeria recently concluded the renegotiation of its tower contracts with IHS and ATC. The revised contracts will support earnings and cash flow development in the business as part of the initiatives to resolve the negative equity position of MTN Nigeria. Discussions about tariff increases for voice and data continue with the authorities in Nigeria.

Commenting on the outlook for South Africa, led by CEO Charles Molapisi, Mupita said the macroeconomic environment appears to be showing signs of stabilising, particularly in inflation trends.

“South African consumer, however, remains constrained, with continued pressure on spending. This is driving a shift in how customers consume postpaid and prepaid bundles, with continuous optimisation and streamlining of spend,” he said.

While the pressures on MTN SA’s consumer and wholesale businesses are expected to remain in the rest of the year, “MTN SA will maintain its focus on sustaining the performance in voice and driving data growth, supported by pricing initiatives in consumer and continued steady performance in enterprise. The impact of the recent price revisions is expected to benefit revenue growth in the second half of 2024.”