MTN Group Reports Decline in Q1 Revenue, Revises 2024 Expenditure




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MTN Group, Africa’s largest telecommunications operator, announced on Tuesday an 18.8% decline in first-quarter service revenue, largely impacted by the performance of MTN Nigeria, and revised down its anticipated capital expenditure for 2024.

With 288 million subscribers across 18 markets in Africa, MTN reported a drop in group service revenue to 42.9 billion rand ($2.34 billion) for the quarter ended March 31, down from 52.8 billion rand in the same period last year. However, in constant currency terms, service revenue, excluding device and SIM card revenue, increased by 11.1%.

The company noted a marginal 3% growth in service revenue from South Africa, surpassing that of Nigeria, its largest market by revenue, which saw a significant decline of 52.8% to 10.2 billion rand. By 0806 GMT, MTN shares were down 2.92%.

MTN Group President and CEO Ralph Mupita, according to Reuters, attributed the challenging macro environment in the first quarter of 2024 to ongoing high inflation and local currency devaluations in key markets. He also cited global geopolitical tensions and disruptions, including the civil war in Sudan and subsea cable cuts, impacting network availability and revenue generation.

Reported group earnings before interest, tax, depreciation, and amortization (EBITDA) fell by 28.7% to 17.2 billion rand, but rose by 3.9% in constant currency. The reported EBITDA margin declined by 5.8 percentage points to 37.9%, mainly due to rising costs and currency depreciation, particularly in Nigeria.

In response to the challenges, MTN Group revised down its expected capital expenditure for 2024 to approximately 28 billion rand to 33 billion rand, compared to a previous target of 35 billion rand to 39 billion rand.

This revision is largely attributed to a reduction in expected spending by MTN Nigeria, following an extraordinary general meeting where initiatives to restore profitability were approved. These initiatives include seeking tariff increases, reducing dollar exposure, and lowering capex after extensive network investments in recent years.