Nigeria’s terrible macroeconomic circumstances have as soon as once more punished MTN. Within the first half its 2024 monetary yr to June, the Nigerian subsidiary of South Africa’s MTN Group reported a loss after tax of ₦519.1-billion (R5.7-billion).
Regardless of the weak efficiency, MTN Nigeria CEO Karl Toriola has spoken of a “strong underlying working efficiency regardless of macro headwinds and international foreign money impacts”.
Inflation in Nigeria reached 34.2% in June, whereas the naira has plunged in opposition to the greenback, the rand and different currencies, particularly within the first half of 2024. Painful financial reforms within the West African nation have pushed up inflation and put shoppers and companies beneath appreciable strain.
MTN Nigeria delivered service income development of 32.6% within the first half – in keeping with inflation – pushed by information and supported by voice, fintech and digital companies.
Nevertheless, Ebitda – earnings earlier than curiosity, tax, depreciation and amortisation – fell by 10.9%, with the margin plunging 17.4 proportion factors to 35.6%, knocked decrease by foreign exchange losses. With out the foreign exchange impression, MTN mentioned the Ebitda margin would have been 50.9% — a lot nearer to the long-term common.
It mentioned key priorities for the corporate embody accelerating an earnings restoration, strengthening its steadiness sheet and restoring its web asset place extra rapidly.
Progress
It mentioned it’s making progress in enhancing MTN Nigeria’s detrimental capital place, a subject that was the topic of a particular assembly with shareholders in April. These initiatives embody:
- Lobbying regulators to approve shopper worth will increase to help long-term sustainability of the business;
- Specializing in driving margin restoration;
- Optimising capital expenditure;
- Lowering US greenback publicity to cut back foreign exchange losses; and
- Reviewing tower lease contracts.
Operationally, the image is rosier:
- Service income development was 32.6% yr on yr — though this was in keeping with inflation;
- Voice income climbed by 12.4%, nicely under inflation;
- Information income jumped 54.7%, pushed by an growth in subscriber numbers and information utilization. This demand has continued into the second half of the monetary yr, in response to MTN;
- 4G inhabitants protection reached 82%, with 5G protection at 12.7%. Smartphone penetration topped 55%, with information site visitors climbing 42.6% yr on yr; and
- Digital companies had been a star performer, with income virtually doubling yr on yr, whereas the enterprise enterprise expanded by 63.7%.
Nevertheless, operational expenditure greater than doubled within the interval due to the depreciation within the naira, greater power prices and the introduction of VAT on tower leases final September. Excluding these results, opex rose by 31.7%, barely under the common inflation charge.
Web foreign exchange losses jumped by 95% to ₦887.7-billion in comparison with the identical interval final yr.
Core capital expenditure – primarily cash invested in community infrastructure – rose by 17.4% (nicely under inflation).
MTN Group’s share worth in Johannesburg opened down on Wednesday on information of the Nigerian half-year numbers. They had been final altering fingers at R76.65, down 0.2% on the session.
12 months-to-date, MTN has misplaced a 3rd of its worth. Over a three-year interval, the share is down 27%.
Principal rival Vodacom Group has seen its shares tumble by 23% over the identical three-year interval, reflecting the pressures going through telecommunications operators in South Africa and the broader continent. – © 2024 NewsCentral Media
