MTN Group CEO Ralph Mupita announced optimism regarding the recovery of its Nigerian operations following significant financial losses attributed to naira devaluation and high costs. The company is enacting strategies such as renegotiating leases and increasing tariffs. While it faces challenges in Sudan due to conflict, MTN continues to pursue operational improvement across its Africa markets.
Ralph Mupita, the CEO of MTN Group, stated that the most challenging period for the company in Nigeria appears to be concluding as the subsidiary begins to recover. This optimism follows a naira devaluation that resulted in a substantial pre-tax loss of R4.4 billion for the group. Nigeria has faced persistent dollar shortages, prompting government measures that devalue the naira to stabilize the economy and attract investments. The situation has been exacerbated by high inflation and interest rates, significantly impacting costs and escalating MTN Nigeria’s pre-tax loss to ₦550.3 billion (R6.4 billion).
Despite these setbacks, MTN is implementing several strategies to recover profitability, including renegotiating tower leases and a recent tariff increase approved in January. Mupita expressed his confidence in this recovery, noting, “That pain which we’ve had for 18 months, is abating somewhat… the business is growing very strongly. So I’m actually very bullish and confident that we’ll see strong recovery in Nigeria.” The company’s broader operations span 16 markets in Africa, boasting 291 million subscribers. Additionally, MTN has successfully cut costs by R3.8 billion, including R1.2 billion from renegotiated tower leases.
However, MTN’s performance in Sudan has been adversely affected by ongoing armed conflict, leading to impairments totaling R11.7 billion. Mupita remarked on the slow recovery of their operations, indicating, “we’ve started to see sites coming back on air” in conflict-ridden areas, including the capital Khartoum, where the network had previously been non-functional since April 2023. Analysts acknowledge the company’s solid underlying performance, particularly its service revenue when adjusted for constant currency, despite significant challenges from macroeconomic and currency-related issues beyond MTN’s control. The group’s overall service revenue fell by 15% to R177.8 billion but increased by 14% in constant currency studies.
In summary, MTN Group is optimistic about its recovery trajectory in Nigeria following a challenging financial period marked by a naira devaluation and extensive losses. The implementation of cost-saving measures and strategic initiatives signals a positive outlook. Although faced with difficulties in regions like Sudan, the company remains committed to improving operational effectiveness and responding proactively to macroeconomic challenges.
Original Source: techcentral.co.za
