MTN Group’s Earnings Hit by Nigeria’s Currency Woes & Sudan Crisis

In a year marked by both challenge and resilience, MTN Group has unfolded its financial narrative, revealing a significant 68.9% drop in full-year earnings. If you dig deeper into the details, you’ll see that economic turbulence, specifically in the form of currency devaluation and the volatile situation in Sudan, reshaped the company’s landscape. The figures speak volumes, with the South African telecom titan posting a stark loss of 9.59 billion rand, roughly equivalent to a staggering $526 million.

What does this signify for a company as vast and influential as MTN? Headline earnings per share, the quintessential gauge of profitability, plunged to 98 cents — a notable descent from 315 cents posted just a year prior. These numbers, stark as they may seem, come from a company operating through a labyrinth of complexities across 18 markets, where currency fluctuations can abruptly alter the tide.

The telecommunications realm is no stranger to adversity, but as Africa’s preeminent telecom entity by revenue, MTN’s challenges are emblematic of broader market trends. Who could ignore the role of Nigeria here? A country responsible for a third of MTN’s sales, yet grappling with intense currency depreciation. Overlay this with the strife in Sudan, a nation where operational hurdles are manifold, and the implications become clear.

Yet, not all is gloom. In a measure of strategic assurance, MTN shared the decision to dispense a dividend of 3.45 rand per share. An intriguing gesture, one that underscores a long-term vision and foundational confidence. It resonates with the audacity of a company that looks beyond immediate setbacks toward future horizons.

Reflecting on this duality of challenge and anticipation, Ralph Mupita, the Group CEO, emerged with a reflective yet optimistic tone: “We are pleased to report a strong underlying performance and strategic execution for FY2024, despite challenges in the operating environment,” he stated. There’s a narrative being sketched here, one that mingles resilience with pragmatic optimism.

Mupita continued, addressing the flickers of stability amidst macroeconomic upheavals: “We are encouraged by the relative stability of important key macroeconomic indicators in the second half, such as inflation and forex rates in certain of our key markets.” Stability is elusive, yet its return is often heralded with such cautious optimism.

MTN’s Revenue Performance Across Business Segments

Diving into the granular aspects of MTN’s performance, data revenue initially showcases a puzzling narrative. On the face of it, there’s a decline of 12.3% in reported terms. However, if you adjust for currency constancy, the narrative shifts significantly to an impressive climb of 21.9%. A similar tale unravels for the fintech division, where an 11% rise in reported revenue transforms into a substantial 28.5% uptick under constant currency scrutiny.

Let’s consider EBITDA — a cornerstone financial metric measuring earnings before interest, tax, depreciation, and amortization. Here too, the story bifurcates: a reported dip of 33.5% versus a constant currency elevation of 10.2%, bringing the figure to a notable R70.1 billion. The EBITDA margin, though, tells its own story of contraction, falling by 8.9 percentage points to 32% on a reported basis, while staying relatively more stable within a constant currency framework.

But where one loses, another battleground offers gainful insights. MTN’s customer base dovetails this narrative with growth. Subscribers rose by 2.2% to a commendable 290.9 million. Among these, active data subscribers saw a substantial climb of 7.7%, reaching 157.8 million. Meanwhile, the domain of Mobile Money, a force of transformation in emerging economies, noted its monthly active users inching upward by 0.9%, now totaling 63.1 million.

Let us pause and ponder — how does a company sustain and pivot amidst such volatilities? Perhaps, MTN’s strategy will say much more about the future than its current figures. As with any grand play, it’s the perseverance and adaptation in the face of adversity that writes the most compelling narrative. It is a tale of resilience and foresight, as told over balance sheets and boardroom strategies.