There’s a touch of Monty Python about MTN’s just-released results for the 12 months to end-December 2024. “MTN Group is well positioned to capture the exciting opportunities in our markets and deliver on our medium-term objectives to sustain growth, create shared value in nation states and communities, and unlock value for our stakeholders,” said group CEO Ralph Mupita – sounding a little like the Black Knight in Monty Python’s Holy Grail. “’Tis but a scratch,” said the knight, after the loss of his right arm in battle.
Perhaps not quite the loss of an arm, but MTN had just reported a record loss of R9.59bn for the 12 months. Basic earnings per share plunged more than 100% to a loss of 521c from earnings of 227c, with revenue down 15% to R188bn from R221bn in 2023.
The market seemed to adopt the Black Knight perspective, with the MTN share price ending the day over 2% firmer at R115.83. This brings its gains in calendar 2025 to an impressive 23%.
Why though? MTN is not only fighting on more fronts than you could shake a stick at, but it’s also showing the scars. So why is the share price not being hammered?
One analyst suggests the upbeat response was “because all of the bad stuff is out of the way now”. Indeed, there was a lot of “bad stuff” in the 2024 results announcement. The worst was the 70% slump in the Nigerian naira, followed by the war in Sudan, which forced a R11.7bn write-down.
Peter Takaendesa, portfolio manager and head of equity at Mergence Investment Managers, takes a measured view. “All South African shares have done quite well today,” he tells Currency. And he points out that MTN did a good job of pre-guiding the results.
The worst was already known thanks to a trading statement released at the end of February, which was quickly followed by Nigeria’s grim results. “The only thing new was additional information on South Africa and the dividend payments,” says Takaendesa adding: “It seems the underlying trends have improved a little.”
The slightly higher-than-expected dividend (R3.45 against the guidance minimum of R3.30) helped market sentiment, as did Mupita’s guidance of a R3.70 minimum dividend for 2025. That seems a fairly bold, or comforting, statement given that at least some of the immense challenges will roll into the current financial year. Strong cash flow and a healthy balance sheet grounds it in reality. And, as Takaendesa says, it’s also expecting to monetise bits of the Nigerian business.
In addition there are the hefty tariff increases mobile network operators were granted in Nigeria earlier this year and the possibility that the naira will be at least a little less unstable.
A helter-skelter ride
There’s no doubt, MTN is not for the faint-hearted. Ditching its troublesome Middle East operations and focusing on Africa was expected to bring some calm but no-one had reckoned for the turbulence Nigeria could cause; or considered the potential ongoing damage of the desperate war in Sudan.
Few analysts believe there’s scope to withdraw from the rest of Africa. It might be something of a whirlwind, but given the comparatively pedestrian growth rates achieved in South Africa, it’s one MTN management has to try and master.
Takaendesa reckons the current management is doing well in the areas over which they have control, but notes there is much that is outside their control.
For others, the helter-skelter ride is not worth it. “All the known bad stuff might be out of the way right now,” says one former investor who has dumped his shares, “but it will inevitably be followed by currently unknown bad stuff.”
And so for now the MTN Black Knight fights on.
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