MTN reports solid financial results, good commercial momentum 

MTN Group on Thursday announced an encouraging set of results for the six months ended 30 June 2019 in the context of difficult trading conditions across its major markets.

Commenting on the results, Rob Shuter, MTN Group President and CEO, in a statement said: “We had a good first half, reporting solid financial results, good commercial momentum and encouraging strategic progress. We saw growth of 12% in adjusted headline earnings per share, which is the first time that we have delivered growth in this measure in recent years. Our service revenue grew just below 10% and EBITDA just above 10%, both on a constant currency basis. Our holding company leverage remains stable at 2.3x, well within our guidance range of 2 to 2.5x. And, as we grew revenue and carefully managed our investment programme, we saw capex intensity drop further, to 16,9%."

Commercially, MTN had strong subscriber growth of 7,7 million in the first six months of the year to reach a total of 240 million subscribers. The number of active data users grew by 3,5 million to 82 million and the 30-day active Mobile Money users grew by 2,4 million to 30 million.

The company's continued focus on the customer experience has seen it record brand NPSˆ leadership across more than 50% of the portfolio, with 12 markets now leading. That contributed to MTN being named the most valuable South African brand in the Brand Finance South Africa 50 report and the most admired African brand by Brand Africa 100.

"During the period we had some landmark events. We successfully completed the listing of MTN Nigeria on the Nigerian Stock Exchange and our e-commerce joint venture Jumia listed on the New York Stock Exchange. Within three months of announcing our asset realisation programme, which is targeting at least

R15 billion over the next few years, we delivered R2,1 billion in proceeds," Shuter said.

He said MTN's advanced instant messaging platform, Ayoba, is now live in three of our West African markets and has more than 300 000 active monthly users. The firm said it is pleased with the formal approval of their super-agent licence in Nigeria, which clears the way for the launch of phase 1 of their Nigeria fintech business while they await a banking licence.

Operating environment

In South Africa, the group contended with a weak macroeconomic environment as well as the introduction of new end-user requirements and the repricing of out-of-bundle data rates. In Nigeria, economic activity was muted in the time of presidential elections and prior to the formation of the cabinet. In Iran, the rial weakened sharply after the re-imposition of US sanctions.

Financial performance

Notwithstanding this environment, in constant currency terms, service revenue grew by 9,7% to R67,9 billion and earnings before interest, taxation, depreciation and amortisation (EBITDA) expanded by 10,2% to R31,2 billion.

In the second half, in South Africa MTN said it will focus on the continued turnaround of the enterprise business, the recovery of prepaid and the launch of Mobile Money.

In Nigeria, it will focus on the further rollout of 4G coverage, the launch of Ayoba and Music Time! as well as accelerating our fintech ambitions by fully leveraging their extensive distribution network to offer a range of transfer and payment services to its GSM customer base.