MTN Group Ltd., Africa’s largest mobile-phone operator, saw its shares plunge by as much as 10% on Monday—the steepest intraday drop since March 2023—after revenue at its South African unit fell and U.S. authorities expanded probes into the company’s past operations in Iran and Afghanistan.
The Johannesburg-based company is revamping its management in response to the weak performance in South Africa, which remains its home market. In a statement, MTN announced the appointment of Ferdi Moolman as chief executive officer of its South African business, replacing Charles Molapisi, while Yolanda Cuba has been named deputy CEO. The company also broadened the portfolio of chief financial officer Tsholofelo Molefe to include mergers and acquisitions, signalling a more aggressive strategy to drive future growth.
The changes come as MTN’s South African unit reported a 3.7% decline in sales in the first half of the year, underscoring the challenges in the country’s competitive and saturated prepaid market.
Meanwhile, MTN’s Nigerian operations—now its largest market—posted 37.5% revenue growth to 28.4 billion rand ($1.6 billion) in the same period, overtaking South Africa as the company’s biggest revenue contributor.
Despite the setback at home, MTN reported a strong overall financial turnaround, recording net income of 9.75 billion rand ($540 million) in the six months to June 30, compared with a loss of 7.39 billion rand ($410 million) in the same period last year. The prior-year loss was largely due to severe currency depreciations in Nigeria and Ghana.
Still, investors remain concerned about ongoing investigations by the U.S. Department of Justice (DOJ). The probe relates to MTN’s minority 49% stake in Irancell and the company’s former Afghanistan subsidiary, which it exited in 2022.
“A lot of these things are legacy issues, and we have to spend time to defend ourselves,” MTN Group CEO Ralph Mupita said at a media briefing, adding that South Africa’s fragmented telecoms market continues to squeeze profits.
Bloomberg Intelligence analyst John Davies described the update as “mostly negative”, citing investor concerns over South Africa’s guidance cut, the sluggish prepaid market, and the legal risks tied to U.S. probes.
In a separate interview with Bloomberg Television, Mupita warned that “too many operators in South Africa reduces the profit pool”, hinting at possible future consolidation in the industry.
MTN has been working to simplify its business model, with plans to focus on three core platforms: connectivity, fintech, and digital infrastructure. Mupita noted that the company is pushing ahead with carve-outs of certain digital infrastructure assets to unlock value.
The company previously abandoned talks to acquire Telkom SA SOC Ltd three years ago but remains open to strategic opportunities as it seeks to revive its South African operations and reinforce its leadership across Africa’s telecom landscape.
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