MTN Nigeria has reported a post-tax loss of ₦400.4 billion ($260.2 million) in 2024, causing it to lose its position as the group’s highest-earning subsidiary for the first time since 2019. It generated $2.26 billion, significantly down from the previous year’s $4 billion. While experiencing a revenue rise due to operational increases, foreign exchange losses have heightened financial strain, affecting future investment prospects and revenue guidance.
MTN Nigeria has lost its status as the highest-earning subsidiary within the MTN Group for the first time since 2019, recording a post-tax loss of ₦400.4 billion ($260.2 million) in 2024. This development has resulted in a shift in revenue standings, with Nigeria now positioned behind the West and Central Africa (WECA) region and South Africa, indicating a notable change in the Group’s revenue dynamics.
Historically a significant contributor, MTN Nigeria, which comprises 51% of Nigeria’s telecom subscriber base, generated $2.26 billion in 2024, declining substantially from $4 billion in 2023. Despite an increase in revenue to ₦3.36 trillion in 2024 (up from ₦2.47 trillion in 2023), foreign exchange losses attributed to a weakened naira and inflation severely impacted its profitability.
Conversely, MTN South Africa recorded an impressive $2.89 billion in revenue, overtaking Nigeria to become the Group’s second-largest subsidiary. The WECA region emerged as the leader in revenue contributions at $3.1 billion, with Ghana identified as its primary contributor, as noted by MTN Group CEO Ralph Mupita.
The financial challenges faced by MTN Nigeria could affect the MTN Group’s future investment strategies in Nigeria, its largest market in Africa. While MTN Nigeria received around $986.2 million for network upgrades and 5G initiatives in 2024, ongoing revenue declines could put future financial allocations at risk, thereby impacting growth and service offerings.
Although South Africa had historically been the Group’s main revenue source, Nigeria surpassed it in 2013. After maintaining the lead until 2017, Nigeria regained its top spot in 2019, only to fall back in 2024. Following the losses, MTN Group suspended revenue guidance for Nigeria, but with tariff increases sanctioned by the Nigerian Communications Commission (NCC), the group has reinstated its revenue outlook.
In light of the evolving market conditions, CEO Ralph Mupita expressed optimism, stating, “We saw inflation ease towards the end of 2024, which gives us confidence. We have not yet completed the implementation of the tariff increases in Nigeria.” As of December 31, 2024, MTN Group, which operates across 16 countries in Africa and the Middle East, serves 291 million customers and continues to streamline operations in favor of its core African markets.
MTN Nigeria’s decline in revenue has significant implications for its status within the MTN Group and for future investments in Nigeria. The financial strain resulting from currency depreciation and increased inflation emphasizes the need for stabilization in economic conditions to enhance consumer spending power. The reinstated revenue guidance, coupled with approved tariff increases, presents a potential pathway for recovery, but the challenges remain influential on MTN’s trajectory.
Original Source: techcabal.com
