We begin 2025 encouraged by the trajectory of key financial metrics such as service revenue, efficiencies, free cash flow and leverage.
Tsholofelo Molefe CA(SA) Group Chief Financial Officer
Our financial performance in 2024 was affected by foreign exchange volatility in many markets, notably the sharp devaluation of the naira against the US dollar in the first half of the year, and elevated inflation. Some of these dynamics are articulated in the Chairman and Group President and CEO sections. In terms of overall forex impacts, this exerted upward pressure on our operating expenses and resulted in forex losses for the year totalling R18.1 billion. This amount was over and above adverse translation effects in terms of the conversion from local currencies to our reporting currency, the rand.
Operating in conflict-hit Sudan remained challenging as MTN Sudan was impacted by power outages, fuel shortages and other network disruptions. The ongoing situation in the country resulted in the Group recording an impairment of R11.7 billion for the operation in 2024.
The other significant impacts on reported financial results included gains of R1.3 billion on the disposal of MTN Afghanistan and MTN Guinea-Bissau, offset by losses of R1.9 billion on the disposal of MTN Guinea-Conakry. There were also impairments of property, plant and equipment and intangibles of R12.2 billion related to MTN Sudan and our InsurTech JV, aYo.
Notwithstanding, we are pleased with the underlying financial performance of the business, which showed encouraging momentum, particularly in H2.
Guided by our disciplined capital allocation and financial frameworks, we target topline growth in our operations that exceeds local inflation. We prioritise the prudent deployment of capex, strong free cash flow generation and cash upstreaming from our Opcos. Our goal includes maintaining financial flexibility to support our strategy execution, as well as returns in excess of our cost of capital.
From a financial perspective, our expense efficiency programme (EEP) has been critical in helping the business to navigate the challenges in our external environment, including containing organic operating costs below local inflation. Having realised efficiencies of R3.8 billion in 2024, we were able to mitigate the pressure on profitability, which is reflected in the growth achieved in our EBITDA in constant currency terms.
Our capex deployment – R29.9 billion (ex-leases) in 2024 – supported the growth in our connectivity operations and platforms, enabling us to deliver results that were broadly in line with our medium-term guidance objectives. Importantly, this included maintaining our capex intensity (15.9% in 2024) within our target range of 15-18%.
As noted, our free cash flow showed encouraging momentum in H2 2024, supported by an improved operating performance. Our focus is to complement this operational momentum through prudent management of our working capital and capex deployment. We are also encouraged by the rate of cash upstreamed from operations in 2024, totalling R14 billion. This focus on cash generation and upstreaming has helped to safeguard the health and flexibility of our balance sheet, which is critical to the growth and sustainability of our business.
We continue to do the work to improve our return profile, which is reflected in our medium-term strategic and financial objectives.
We delivered a resilient underlying performance, marked by disciplined commercial execution and a focus on efficiencies. Group service revenue increased by 13.8%* in constant currency to R177.8 billion, with strong performances in our key growth vectors of data (up 21.9%*) and fintech (up 28.5%*). All large markets delivered growth compared to 2023. Excluding conflict-affected MTN Sudan, our Group service revenue growth would have been 14.4%*.
The Group delivered a resilient EBITDA expansion of 10.2%* to R70.1 billion, excluding the effects of one-off items. The EBITDA margin declined by just 0.8pp* to 38.2%* despite the pressures on our topline and impacts on costs from inflation and naira depreciation.
We reported headline earnings per share (HEPS) of 98 cps, a decline of 68.9% after several non-operational and once-off items, including hyperinflationary adjustments and forex losses (primarily related to the naira), among other factors. After adjusting HEPS for these non-operational and once-off items, Adjusted HEPS declined by 32.2% to 816 cents, reflecting a strong sequential improvement in trajectory during the second half of the year compared to the first half, with H2 Adjusted HEPS roughly flat year-on-year (YoY).
We made good progress on our EEP, realising sustainable savings of R3.8 billion in 2024, including R1.3 billion from the renegotiation of the IHS tower lease contracts in Nigeria.
We sustained the investment in our networks, with R53.3 billion in capex on an IFRS 16 basis, as a result of lease modifications in various larger operations. Operating free cash flow was R31.4 billion, excluding expenditure on spectrum and licence acquisitions, and while lower than that in 2023, it reflects an encouraging improvement in second half cash flow generation.
What was especially encouraging in our financial performance, particularly in light of the macro pressures on our business, was the positive momentum in H2 service revenue, earnings, free cash flow and leverage ratio. These are illustrated in the charts that follow.
Positive momentum in H2 financial results
Service revenue (%*)
EBITDA (Rbn*)
EBITDA margin (%*)
Adjusted HEPS (cents)
Operating free cash flow (Rbn)
Cash upstreaming (Rbn)
Group leverage (x)
Holdco leverage (x)
MTN retains a disciplined capital allocation framework. While we target specific outcomes within this framework, we remain cognisant of the broader macro environment, which may require flexibility in how we implement this during different periods and across various Opco operating environments. Considering this, our capital allocation framework has served us well and remains relevant as we continue to navigate the near-term uncertainties in our operating environment.
The return of cash to shareholders is an important part of our allocation framework and the Board declared and paid out a dividend per share of 345 cents – above the guided 330 cents. The Board has also indicated that it anticipates paying a minimum ordinary dividend of 370 cents for the 2025 financial year. The return of cash is therefore a key discussion within the Board's deliberations and will continue to be evaluated as the business' operational and financial profile continues to evolve.
We are pleased with the overall financial profile of our business, anchored in our capital allocation framework, and we will continue to remain disciplined in the management and deployment of capital to support growth as well as the creation and preservation of value.
From a finance perspective, our priorities include the following.
