MTN results turn out better than expected
JSE share price responds positively
MTN IMPROVED sales and added subscribers in the September quarter, despite headwinds at its biggest markets that have wiped off billions in market share.
MTN shares rose 3.27 percent to close at R86.75 yesterday.
The telecoms giant yesterday posted a 10 percent year-on-year service revenue growth and increased subscribers by 2.5 million to 225.4 million in 21 countries in Africa and the Middle East.
MTN group chief executive Rob Shuter said the group’s performance had exceeded expectations.
“Group service revenue grew by 10 percent year-on-year, ahead of our medium-term target of upper-singledigit growth, supported by continued strong growth in voice and data revenue. These results were delivered in challenging operating and currency conditions,” Shuter said.
The highlights of the group’s numbers were the 23.9 percent hike in data revenue, a 5 million quarter-on-quarter growth in data subscribers to 74.2 million, and a 5.2 percent growth in outgoing voice revenue.
In South Africa, year-on-year service revenue grew 3 percent as the company grappled with a weak rand and high handset prices.
“In a weak economy, consumers felt the pressure of a higher VAT rate, becoming increasingly price sensitive,” Shuter said.
Local data and digital revenue increased by 12.5 percent and 9.9 percent respectively, while outgoing voice revenue declined by 8.4 percent.
The group introduced social media bundles as consumers and politicians waged a war on high mobile data prices.
“As a result, customers optimised their data and voice spend and the number of active data subscribers increased by 6.7 percent quarter-on-quarter to 13.5 million,” Shuter said.
Wayne McCurrie, an analyst at First National Bank Wealth and Investments, said MTN had posted good results.
“Data is up 24 percent and voice 5 percent. Nigeria was strong despite regulatory challenges,” said McCurrie.
Nigeria’s service revenue strengthened by 17.4 percent, led by a 52.5 percent increase in data revenue and a 21.5 percent increase in outgoing voice revenue in the quarter under review.
MTN lost more than a third of its value in the September quarter, following a major sell-off sparked by troubles with Nigerian authorities.
The Central Bank of Nigeria ordered that MTN return $8.1 billion (R118bn) in dividends that were allegedly moved from the country between 2007 and 2015 at the end of August.
Nigeria’s attorney-general also said that the group should pay back $2bn for unpaid taxes on foreign payments and imports.
Shuter said the company would continue with its plans to list in Nigeria, despite problems in that country.
“In the quarter, the group engaged extensively with authorities in Nigeria to deal with the matters they raised,” he said.
The listing in Nigeria was part of the company’s $5.2bn fine for unregistered SIM cards in 2015.
MTN listed in Ghana, which recorded a 22.9 percent boost in service revenue. Irancell had a tough quarter due to the devaluation of the rial after the government announced a new exchange rate regime for regulating imports.