MTN delivered improved results for the six months ended 30 June 2017 and is on track to meet the financial
year 2017 guidance communicated in March 2017.
Macro-economic conditions remain challenging across a number of our markets, with Nigeria continuing to experience a weaker naira as well as hard currency liquidity challenges. Although South Africa entered a technical recession in the first quarter, the rand strengthened considerably against the US dollar during the period, while many of the currencies in our other markets weakened. Despite these macro-challenges, the Group continues to deliver on its operational targets.
“We are seeing pleasing progress in our key growth drivers of data and digital services against headwinds of
challenging macro-economic conditions and foreign exchange currency pressures. We continue to strengthen our
focus on operational excellence with our six strategic pillars integrated in our new BRIGHT strategy. Our
focus during the second half of the year will be to entrench our BRIGHT strategy, complete our network
investment programme and build medium-term financial KPIs and targets for the BRIGHT strategy,” says Rob Shuter, MTN Group President and CEO.
During the past six months the management team undertook a thorough review of the Group strategy and developed
a clear growth plan for MTN that will be arranged under six strategic pillars comprising: Best customer experience:
BRIGHT builds on work done over the past 18 months, in particular the Project IGNITE, our operational execution
programme embarked on last year, in our two largest markets MTN South Africa and MTN Nigeria.
Group revenue in constant currency grew by 6.7% to ZAR64 315 million, underpinned by 10.8% growth in revenue in
Nigeria and a 5.2%, on an organic basis, improvement in service revenue growth in South Africa.
MTN Uganda, MTN Ghana and MTN Ivory Coast also contributed positively to the Group’s top-line growth.
MTN Cameroon experienced a challenging period, negatively impacted by the data network shutdown in some parts of the country in the first quarter.
The improvement in Group revenue was mostly attributable to strong growth in data and digital revenue, supported
by stable outgoing voice revenue. Data revenue increased by 31,9%* to ZAR13 952 million, supported by the improved
quality and capacity of our data networks in key markets. Digital revenue increased by 24.7%*, driven mainly by
mobile financial services (MFS).
MFS continued to gain traction, with the Group adding 2.7 million active MTN
Mobile Money (MoMo) customers in the first half of the year. Outgoing voice revenue remained flat for the period
at ZAR32 768 million.
The Group’s reported earnings before interest, tax, depreciation and amortisation, impairment of goodwill, net
monetary gains and share of results of joint ventures and associates after tax (EBITDA) margin was 37.9%.
This was mainly as a result of the once-off profit (ZAR6 017 million) realised on the exercise of the exchange right where the Group’s interest in the Nigeria Tower InterCo B.V. (INT) was exchanged for a higher shareholding in IHS Holding Limited (IHS). This was partly offset by fixed asset impairments for MTN Sudan (ZAR1 690 million) and MTN Syria (ZAR1 125 million) relating to the carrying value previously written up under hyperinflation.
On an operational basis (excluding pro forma adjustments), the Group’s EBITDA margin declined by 4,2 percentage points (pp) to 32.9%. MTN Nigeria’s EBITDA margin (excluding the Nigerian regulatory fine) declined by 11.5pp to 38.3%.
This was largely as a result of higher foreign-currency-denominated expenses in Nigeria following the depreciation of the naira against the US dollar. This was partly offset by a 3,4pp growth to 33,5% in the EBITDA margin in South Africa.
The MTN South Africa margin improvement was largely supported by lower handset subsidies and volumes,
as well as a strong rand benefiting the cost of handsets in the period.
MTN Uganda, MTN Ghana and MTN Ivory Coast
reported an increase in EBITDA margins while MTN Cameroon’s margin declined largely as a result of lower
Reported headline earnings per share (HEPS) were 217 cents** compared to a 271 cents** headline loss per share in
the comparable period, impacted by the Nigerian regulatory fine of 474 cents** (454 cents of the Nigerian fine fully
expensed and 20 cents of the interest unwind). In the current period, the Nigerian regulatory fine interest unwind
reduced HEPS by 24 cents.
Subscriber numbers in the period decreased by 3,6% to 231,8 million impacted by a decline in subscriber numbers in
MTN Nigeria and MTN Ghana. This was largely a result of the Group’s initiative to modernise subscriber definitions
to reflect the business’s changing mix of revenue streams. The implementation of the modernised definitions continues
and is expected to be completed by the end of the year.
The Group continued to invest in the roll out of network and information technology across its markets. Capital
expenditure (capex) was lower than expected, impacted by limited foreign currency availability in Nigeria, some
execution challenges as well as the seasonality of the capex cycle. In the period, a total of 4 404 3G and
3 478 4G co-located sites were rolled out.