MTN Group reported a profit of $15.8 million from the sale of Guinea-Bissau to Telecel, while incurring a loss of $75 million from the disposal of Guinea-Conakry. The sales are part of MTN’s strategic shift away from less profitable markets, concentrating instead on key West African operations.
MTN Group, the foremost telecommunications operator in Africa, has reported a gain of R287 million (approximately $15.8 million) from the sale of its Guinea-Bissau subsidiary to Telecel. This transaction is part of MTN’s strategy to exit from smaller markets in West and Central Africa, particularly because these smaller markets contributed merely 7.3% to the group’s revenue in 2023.
The sale, which has passed regulatory scrutiny, is intended to streamline MTN’s operations by allowing the company to focus on more lucrative markets. In October 2023, MTN accepted a binding offer from Telecel for both MTN Guinea-Bissau and MTN Guinea-Conakry, each valued at a nominal $1, with the final agreements concluded on December 15, 2023.
While MTN successfully gained from the sale of Guinea-Bissau, it incurred a loss from the disposal of MTN Guinea-Conakry, which was sold to the Guinean government. This sale resulted in a reclassification of R1 370 million (about $75 million) in accumulated foreign currency translation reserve losses to the profit and loss statement, as noted in MTN Group’s 2024 financial results.
The variation in outcomes is further influenced by MTN Guinea-Bissau’s financial difficulties, which included a loan default of R171 million (approximately $9.4 million) leading to insolvency, as reported in December 2023, when liabilities outstripped assets. Moving forward, MTN intends to concentrate its efforts on key markets in West Africa, such as Ghana, Cameroon, and Côte d’Ivoire, which generated 19% of the company’s revenue in 2023.
In summary, MTN Group’s sale of its Guinea-Bissau subsidiary yielded a profit of $15.8 million, reflecting a strategic decision to divest from smaller markets. However, the concurrent sale of Guinea-Conakry led to substantial losses. These transactions signify MTN’s focus on enhancing operations within more profitable regions of West Africa, particularly Ghana, Cameroon, and Côte d’Ivoire.
Original Source: thecondia.com
