Elevated inflation, forex movements and the conflict in Sudan put upward pressure on costs
14 November 2024 - 09:42
byJacqueline Mackenzie
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
MTN Group experienced challenging macro and regulatory conditions in the first nine months of the year, though it noted the trends eased in the third quarter.
Group earnings before interest, tax, depreciation and amortisation (ebitda) was down 35% to R45.69bn in the third quarter, but up 3.4% in constant currency, the group said in a statement on Thursday.
Elevated inflation, foreign exchange movements and the conflict in Sudan put upward pressure on costs. These pressures were mitigated by savings derived from the successfully renegotiated tower lease contracts in Nigeria in August, the group said.
Group service revenue decreased by 18.5% to R127.37bn but was up 12.9% in constant currency. MTN SA reported a 3.3% rise in service revenue, while MTN Nigeria, MTN Ghana and MTN Uganda’s service revenue increased by 33.3%, 31.9% and 20.1% respectively in constant currency.
Voice revenue decreased by 31.3% but was up 1% in constant currency. Data revenue decreased by 15.3%, but was up 21.3% in constant currency, while fintech revenue grew 8.5%, and by 28.9% in constant currency.
Total subscribers increased by 1.6% to 288-million, with active data subscribers up by 7.4% to 152.8-million.
Mobile Money (MoMo) monthly active users (MAU) increased by 5.7% to 61.5-million.
Fintech transaction volumes increased by 17.4% to 14.9-billion, with the transaction value rising 27.1% to $229.2bn.
“In the first nine months of 2024, MTN Group navigated a challenging macro environment and regulatory developments to deliver a resilient operating performance. There was an encouraging deceleration in blended inflation and reduced currency volatility across our markets in [in the third quarter of] 2024 relative to the first two quarters of the year,” said CEO Ralph Mupita.
He noted that in Nigeria, the naira was less volatile on a sequential basis in the third quarter than in preceding quarters. The rand and Ugandan shilling strengthened, while the cedi weakened by 19.5% against the dollar.
“With a continued focus on our strategic priorities, we invested capex of R19.8bn in our networks and platforms, reflecting capex intensity of 14.7% — compared with our medium-term target range of 15%-18%,” he said.
“This helped to support the robust data traffic growth of 34.1% (37% excluding JVs) and fintech transaction volumes (up 17.4%) that underpin our growth thesis,” he said.
“Although the macro environment is forecast to remain challenging in the near term, we are encouraged by the abating trends in inflation in our footprint, as well as reduced volatility in forex movements,” said Mupita.
“As these factors continue to normalise, we anticipate positive impacts on consumer spending power and our business operations.”
The group expects total capex deployment for the 2024 financial year to fall within its guidance of R28bn-R33bn.
“Our work to achieve expense efficiencies of R7bn-R8bn between 2024 and 2026 continues, to mitigate the impacts of macro volatility on our business. We will maintain our disciplined approach to capital allocation, focused operational execution, and strategic delivery in the final quarter of 2024.
“Our overall medium-term guidance framework and anticipated ordinary dividend of 330c per share for [the 2024 financial year] remain unchanged,” he said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
MTN keeps medium-term guidance unchanged
Elevated inflation, forex movements and the conflict in Sudan put upward pressure on costs
MTN Group experienced challenging macro and regulatory conditions in the first nine months of the year, though it noted the trends eased in the third quarter.
Group earnings before interest, tax, depreciation and amortisation (ebitda) was down 35% to R45.69bn in the third quarter, but up 3.4% in constant currency, the group said in a statement on Thursday.
Elevated inflation, foreign exchange movements and the conflict in Sudan put upward pressure on costs. These pressures were mitigated by savings derived from the successfully renegotiated tower lease contracts in Nigeria in August, the group said.
Group service revenue decreased by 18.5% to R127.37bn but was up 12.9% in constant currency. MTN SA reported a 3.3% rise in service revenue, while MTN Nigeria, MTN Ghana and MTN Uganda’s service revenue increased by 33.3%, 31.9% and 20.1% respectively in constant currency.
Voice revenue decreased by 31.3% but was up 1% in constant currency. Data revenue decreased by 15.3%, but was up 21.3% in constant currency, while fintech revenue grew 8.5%, and by 28.9% in constant currency.
Total subscribers increased by 1.6% to 288-million, with active data subscribers up by 7.4% to 152.8-million.
Mobile Money (MoMo) monthly active users (MAU) increased by 5.7% to 61.5-million.
Fintech transaction volumes increased by 17.4% to 14.9-billion, with the transaction value rising 27.1% to $229.2bn.
“In the first nine months of 2024, MTN Group navigated a challenging macro environment and regulatory developments to deliver a resilient operating performance. There was an encouraging deceleration in blended inflation and reduced currency volatility across our markets in [in the third quarter of] 2024 relative to the first two quarters of the year,” said CEO Ralph Mupita.
He noted that in Nigeria, the naira was less volatile on a sequential basis in the third quarter than in preceding quarters. The rand and Ugandan shilling strengthened, while the cedi weakened by 19.5% against the dollar.
“With a continued focus on our strategic priorities, we invested capex of R19.8bn in our networks and platforms, reflecting capex intensity of 14.7% — compared with our medium-term target range of 15%-18%,” he said.
“This helped to support the robust data traffic growth of 34.1% (37% excluding JVs) and fintech transaction volumes (up 17.4%) that underpin our growth thesis,” he said.
“Although the macro environment is forecast to remain challenging in the near term, we are encouraged by the abating trends in inflation in our footprint, as well as reduced volatility in forex movements,” said Mupita.
“As these factors continue to normalise, we anticipate positive impacts on consumer spending power and our business operations.”
The group expects total capex deployment for the 2024 financial year to fall within its guidance of R28bn-R33bn.
“Our work to achieve expense efficiencies of R7bn-R8bn between 2024 and 2026 continues, to mitigate the impacts of macro volatility on our business. We will maintain our disciplined approach to capital allocation, focused operational execution, and strategic delivery in the final quarter of 2024.
“Our overall medium-term guidance framework and anticipated ordinary dividend of 330c per share for [the 2024 financial year] remain unchanged,” he said.
mackenziej@arena.africa
MTN expects revenue lift in Rwanda if interconnect fees resume
MTN Uganda’s profit rises 30% as subscribers grow
MTN Ghana pushes ahead with infrastructure-sharing agreements
Weak naira continues to hamper MTN Nigeria
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.