After almost two years of financial pain brought on by a policy change that saw Nigeria’s currency crashing, losing more than half of its value, the head of MTN is bullish that the group’s largest business is now in recovery.
Like many other companies operating in Nigeria, MTN has been a casualty of the devastation caused by the Nigerian naira’s more than 70% plunge since mid-2023.
The group dipped into the red at the halfway stage of its 2024 financial year, the first time the telecom major has reported a loss since 2016, as the further devaluation of the naira and the conflict in Sudan weighed on results.
“We’re encouraged and leaning in very strongly on what we see as a recovery year for us in Nigeria,” group CEO Ralph Mupita told Business Day during a media briefing on Monday.
In April 2024, MTN Nigeria convened an emergency meeting of its shareholders to discuss its plans to grow revenue, improve margins and return to profit, in an effort to address declines caused by a challenging operating environment.
At the top of the five-point plan was a lobbying effort for regulated tariff increases meant to boost revenue and offset some of the declines that operators have experienced, as a result of the currency devaluation. This effort paid off when, after a six-year campaign by Nigeria’s mobile network operators including MTN, the country’s government approved a 50% tariff increase in January.
“We’ve upped capex [capital expenditure] in Nigeria because we see good growth prospects there, particularly fuelled by the tariff increases,” Mupita said.
“The naira has been relatively stable in the last couple of months, about the 1,500 mark to the dollar. Inflation is beginning to come down. Our own assessment is that the worst of the structural adjustments in Nigeria, liberalising the exchange rates, removing of fuel subsidies ... that pain, which we had for 18 months, is abating and we see it in the business.”
At 3pm on Monday the dollar was worth 1,538 naira. Inflation in Nigeria slowed to 24.48% in January from 34.8% in December, following a rebasing of the consumer price index.
“The business is growing very strongly. They made a little bit of a profit in the third quarter last year, and another in the fourth quarter.
“We believe that as we progress in this year, they’ll start working their way out of negative equity,” the MTN boss said.
“I’m very bullish about Nigeria to really drive the investment case for MTN as we move into this year and into next year.”
This comes as the aforementioned foreign exchange devaluation and the conflict in Sudan put pressure on MTN group’s full-year earnings.
The group reported a 68.9% decline in headline earnings per share for the year to 98c, while it declared a dividend per share of 345c versus 330c a year ago.
Group earnings before interest, tax, depreciation and amortisation before one-off items decreased 33.5% on a reported basis, but rose 10.2% in constant currency to R70.1bn, with a margin of 38.2% from 39% before.
Group service revenue decreased 15.4% on a reported basis to R177.8bn, but increased 13.8% in constant currency.
Data revenue decreased 12.3% on a reported basis, but increased 21.9% in constant currency, while fintech revenue rose 11% on a reported basis and by 28.5% in constant currency.
Total subscribers increased by 2.2% to 290.9-million, with active data subscribers up by 7.7% to 157.8-million.
Dividend
Mobile Money (MoMo) monthly active users increased 0.9% to 63.1-million and fintech transaction volumes were up 15.3% to 20.3-billion.
“We are pleased to report a strong underlying performance and strategic execution for financial year 2024, despite challenges in the operating environment,” Mupita said.
“We are encouraged by the relative stability of important key macroeconomic indicators in the second half, such as inflation and foreign exchange rates in certain of our key markets.”
The group expected to pay a minimum ordinary dividend per share of 370c after the announcement of its full year results in March 2026, it said.
MTN shares ended 1.56% stronger on the day at R115.19 and are up about 25% so far in 2025.
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