MTN swings back to profit
ROB SHUTER, who has been MTN’s chief executive for five months, yesterday unveiled a strong set of interim results as the company swung back to profit as it increased its data subscribers and revenue.
This comes after a difficult 2016 for Africa’s biggest mobile phone operator as it battled to contain the fall-out after Nigerian authorities slapped it with a $1.1 billion (R14.57bn) fine over unregistered SIM cards.
Total revenue rose 6.7 percent to R64.3bn, while headline earnings came in at R3.9bn, or 212 cents per share, in the six months to end June compared with a loss of R4.9bn, or 271c per share, a year earlier.
The improved numbers were despite the financial crunch in its biggest market, including the significant weakness of the naira in Nigeria, the technical recession in South Africa and hard currency liquidity during the period under review.
“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,” Shuter said.
The group declared an interim dividend of 250c a share, in line with the 2017 financial year guidance of 700c a share.
Data revenue increased by 31.9 percent, following significant improved data network quality and capacity across key markets.
A major highlight was that data users increased 9.1 percent to 122.7 million. Data revenue increased in South Africa by 14.4 percent; 70.4 percent higher in Nigeria; 29.9 percent higher in Uganda an 65.9 percent up in Ghana.
However, capital expenditure guidance was reduced for 2017 to R30bn from a previous guidance of R34.8bn.
But subscriber numbers in the period decreased by 3.6 percent 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,” Shuter said. However, South African subscribers increased 1.5 percent to 31.2 million.
In terms of prospects, Shuter said MTN was on track to meet its 2017 financial year guidance, despite the muted economic growth forecast across its markets.
In South Africa, its biggest market, MTN said it expected mid-single-digit service revenue growth and earnings before interest, taxes, depreciation and amortisation margin expansion of 50 and 100 basis points yearon-year.
And it expected single-digit revenue growth year-on-year in Nigeria, supported by an improved competitive position, and improved network quality. MTN Nigeria also declared an interim dividend, expected to result in $95m being received.
In Iran, MTN expected to benefit from growth in the Iranian economy and from the country’s youthful population, particularly in the digital services space.
Shuter projected that MTN would generate R815bn from revenue pools across its 22 markets by 2020, including R575bn from data, voice and digital services. A total of R210bn was expected from enterprise and R30bn from wholesale revenue, the company said.
Brian Neilson, a director at BMI-Techknowledge, said the results were positive. “After an extended period of bad news, particularly the challenges faced by MTN in Nigeria, a spate of good news is going to be welcomed by all,” he said.
MTN projected data subscribers would grow to 500 million from 200 million by 2020, digital subscribers would grow to 250 million from 150 million, while digital subscribers were expected to 250 million in 2020.
MTN’s share price fell 1.79 percent to close at R117.11 on the JSE yesterday.