MTN Group suffers huge loss over naira devaluation

Africa’s biggest telecommunications company, MTN Group, recorded a half-year loss, due to naira devaluation and operational challenges in Sudan.

The company reported a loss before tax of nine billion South African rand in the six months ended June 30, compared with a restated profit of 8.3 billion rand a year earlier.

“The further devaluation in the naira against the U.S. dollar… and the ongoing conflict in Sudan had the most significant impact on reported results,” Reuters quoted MTN CEO Ralph Mupita.

Mupita said that the company was affected largely by external factors: “Although the underlying commercial momentum and strategy execution were solid in the period, macro headwinds impacted operating results.”

MTN Group, which has 288 million customers across 18 markets in Africa, said its group service revenue decreased 20.8 per cent to 85.3 billion rand.

In constant currency, group service revenue, which excludes device and SIM card revenue, rose 12.1 per cent.

The company’s service revenue from South Africa surpassed that of MTN Nigeria, its biggest market by revenue, rising by 3.3 per cent to 21.1 billion rand.

Revenue from the company’s Nigerian operations tumbled 52.9 per cent to 20.5 billion rand, while on a constant currency basis, it increased 32.4 per cent.

The company also stated that its board expects to pay a minimum ordinary final dividend of 330 cents per share for the 2024 financial year.

The entire telecommunications sector in Nigeria is reeling under the weight of a severe investment squeeze, as the country’s worsening economic conditions continue to take a toll on the industry.

Last week, the Chief Executive Officer of MTN Nigeria, Karl Toriola, warned that the situation would worsen, as telcos faced a further decline in investments due to deteriorating economic conditions.

He stated that investments would not continue to slow if returns were not viable, adding that it was unrealistic to expect investors to put in a dollar and receive only 66 cents in return.