MTN, led by Zimbabwean executive Ralph Mupita, posts first loss since 2016

Omokolade Ajayi -

Key Points

  • MTN Group posted a R9.67 billion ($542 million) loss for H1 2024, driven by the devaluation of the Nigerian naira.
  • MTN Nigeria’s service revenue plunged 52.9 percent amid macroeconomic challenges, contributing to MTN’s first loss since 2016.
  • Despite losses, MTN’s South African operations reported a revenue increase of 3.3%, showing resilience in a tough market.

Africa’s largest telecom service provider, MTN Group, under the leadership of Zimbabwean executive Ralph Mupita, has posted its first financial loss since 2016, driven primarily by the devaluation of the Nigerian naira. 

The telecom giant reported a significant loss of R9.67 billion ($542 million) for the six months ending June 30, 2024. This compares sharply with the R4.43 billion ($248.4 million) profit recorded during the same period last year.

The loss is MTN’s first since it paid a fine of more than $1 billion imposed on the company by the Nigerian government in 2016.

Impact of naira devaluation and macro headwinds

The value of the naira, which has fallen more than 70 percent against the dollar since President Bola Tinubu’s economic reforms began in May 2023, severely impacted MTN’s revenue.

MTN’s service revenue declined by 20.8 percent, falling from R107.73 billion ($6.04 billion) to R85.32 billion ($4.78 billion).

MTN Nigeria, a major revenue contributor, saw its service revenue plunge from R43.58 billion ($2.44 billion) to R20.52 billion ($1.15 billion).

Mixed performance across key markets

Despite the challenges in Nigeria, MTN’s South African operations showed positive results. Revenue from South Africa increased by 3.3 percent, from R20.43 billion ($1.14 billion) to R21.11 billion ($1.18 billion).

EBITDA from South African operations grew by 4.3 percent, while MTN Nigeria’s EBITDA dropped dramatically by 68.3 percent.

Ralph Mupita acknowledged the strain of macroeconomic factors on the group’s performance but highlighted operational strengths in other markets.

“The devaluation of the naira and ongoing conflict in Sudan significantly impacted our results,” Mupita said. He added, “However, we remain optimistic about the progress made in other key markets.”

Currency losses exacerbate financial strain

The devaluation of the naira, which moved from N907 to N1,505 per dollar during the reporting period, resulted in foreign exchange losses of R13.75 billion ($771.7 million) for MTN Nigeria. 

These losses, from unrealized and realized dollar-related transactions, pushed the group into its first loss in years.

MTN’s financial challenges underscore the vulnerabilities faced by multinational companies operating in volatile currency environments.

The company continues to navigate these difficulties while striving to strengthen its performance in other regions.