MTN Group Weighs Down by Nigerian Operations

MTN Group (MTNJ.J), Africa’s biggest telecoms operator, reported on Tuesday an 18.8 per cent fall in first-quarter service revenue, weighed down by the performance of MTN Nigeria

MTN, with 288 million subscribers in 18 markets across Africa, said its reported group service revenue fell to 42.9 billion rand ($2.34 billion) in the quarter ended March 31, from 52.8 billion rand in the same quarter last year.

In constant currency, service revenue, which excludes device and SIM card revenue, rose by 11.1%.

MTN’s service revenue from South Africa surpassed that of Nigeria, its biggest market by revenue, growing marginally by 3% to 10.4 billion rand, while Nigeria tumbled by 52.8% to 10.2 billion rand.

“The macro environment in the first quarter of 2024 remained challenging with ongoing high inflation as well as local currency devaluations in some of our key markets,” Ralph Mupita, group president and CEO said in a statement.

Mupita also cited global geopolitical tensions as a factor impacting the operator’s performance, including the ongoing civil war in Sudan, which severely affected network availability and revenue generation in that business.

MTN was also impacted by subsea cable cuts that resulted in downtime.

Overall reported group earnings before interest, tax, depreciation and amortization (EBITDA) fell by 28.7% to 17.2 billion rand and rose by 3.9% in constant currency.

Reported EBITDA margin declined by 5.8 percentage points to 37.9% due to rising costs and currency depreciation mainly in Nigeria.

The group revised down its anticipated capital expenditure (excluding leases) deployment for 2024 to about 28 billion rand to 33 billion rand from a target of 35 billion rand to 39 billion rand, largely due to a reduction in expected spending by MTN Nigeria.