The MTN Group six months ended 30 June 2019 report revealed solid financial results, good commercial momentum and encouraging strategic progress increasing its subscriber base from 7.7 million in the first six months of the year to reach a total of 240 million.
The result, which was released today, Thursday August 8, 2019 is an encouraging set of results in the context of difficult trading conditions across its major markets.
Commenting on the results, Rob Shuter, MTN Group President and CEO, 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.”
According to him, service revenue grew just below 10% and EBITDA just above 10%, both on a constant currency basis adding, “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%.”
He said: “Commercially, we 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 our 30-day active Mobile Money users grew by 2.4 million to 30 million.”
He promised that the Group continued focus on the customer experience has seen it record brand NPS leadership across more than 50% of the portfolio, with 12 markets now leading.
He added 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 disclosed that the Group advanced instant messaging platform, Ayoba, is now live in three West African markets and has more than 300 000 active monthly users saying, “We are very pleased with the formal approval of our super-agent licence in Nigeria, which clears the way for the launch of phase 1 of our Nigeria fintech business while we await a banking licence.”
He said: “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.”
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. The holding company net debt to EBITDA ratio remained stable at 2.3x, which is well within the group’s guidance range of 2.0 to 2.5x, and capex intensity dropped further to 16.9%, indicating greater efficiency in deploying assets.
Looking forward, he said MTN is well positioned to grow by leveraging its scale and enhancing its competitive position noting that in the second half, in South Africa “we will focus on the continued turnaround of the enterprise business, the recovery of prepaid and the launch of Mobile Money.”
He added: “In Nigeria, we 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 our extensive distribution network to offer a range of transfer and payment services to our GSM customer base.
“Across the rest of the portfolio we have six focus areas. These are: the continued turnaround of our operations in the West and Central Africa region; the resolution of some of the more complicated regulatory situations; the rollout of MusicTime and Ayoba across the group; the asset realisation programme; launch of our pan-African MTN 4 Good campaign and delivering on our medium-term targets.”