MTN Group Posts Strong Data and Fintech Growth Amidst Currency Challenges

MTN Group has announced robust performance in its data and fintech services for the first half of 2024, with revenue soaring by 21% and 27% respectively. The telecom giant also expanded its subscriber base to 288 million, driven by a 9% increase in active data users. This growth underscores the increasing reliance on digital services across the continent.

At 66 million, the number of active Mobile Money users was also more than 9% higher, boosting MTN’s fintech transaction volumes by 18% to 9.7 billion in the period

However, the group’s overall financial performance was overshadowed by macroeconomic headwinds, particularly the sharp depreciation of the naira. This currency volatility resulted in a 50% decline in adjusted headline earnings per share. Despite these challenges, MTN Group remains committed to its Ambition 2025 strategy, focusing on expanding its market presence and enhancing shareholder value.

In line with this strategy, the group made significant progress in increasing local ownership in its African operations. MTN Ghana and MTN Uganda saw notable growth in local shareholding, contributing to a total of R1.7 billion in gross proceeds. Furthermore, the company optimized its portfolio by exiting operations in Afghanistan and Guinea-Bissau.

To support the surge in data consumption, MTN invested over R13 billion in expanding its 4G and 5G networks. This investment is crucial for providing high-speed internet access to millions of customers and driving digital innovation across the continent. The group’s balance sheet remains strong, with a leverage ratio of 1.6x and a favorable debt mix.

Also Read: MTN Records 288 Million Subscribers Across 18 Markets, Up 0.8% YoY

MTN South Africa, having completed its network resilience investment, demonstrated encouraging growth in the second quarter. The company’s focus on network stability has paid off, with network availability reaching 99% by the end of June. MTN Nigeria also delivered a solid underlying performance, despite the severe macro impacts on its financial performance. The company is actively addressing challenges through initiatives such as revenue acceleration, capex optimization, and debt reduction.

The renegotiation of tower contracts with IHS and ATC is expected to bolster MTN Nigeria’s earnings and cash flow. Additionally, the company is in ongoing discussions with authorities regarding potential tariff increases. MTN Group and MTN Zakhele Futhi have announced plans to extend the Broad-Based Black Economic Empowerment scheme by up to three years, reaffirming their commitment to empowering the black community.

Looking ahead, MTN Group remains optimistic about its medium-term outlook and has reaffirmed its full-year dividend guidance of 330 cents per share. The company will continue to execute its Ambition 2025 strategy, focusing on driving growth and unlocking value for shareholders. While the near-term macro environment remains challenging, with headwinds such as inflation and currency volatility, MTN is well-positioned to navigate these obstacles and capitalize on long-term growth opportunities.

“We will continue on the execution of our Ambition 2025 strategy to drive growth and unlock value for all stakeholders over the medium term,” said MTN Group President and CEO Ralph Mupita. “The near-term macro backdrop continues to be challenging across our markets; GDP, inflation and currencies are expected to improve into 2025 across key markets.”