Grew earnings by 12%, service revenue by 10%
MTN Group Thrsday released its first half financial report for 2019, where it announced that it recorded additional 7.7 million subscribers to reach a total of 240 million subscribers on its network across its entire operational base, including Nigeria, as at June this year.
According to the report, despite the difficult trading conditions across its major markets, the telecoms company, which is headquartered in Johannesburg, South Africa, was still able to grow its earnings in the first half of the year, ending June 2019, by 12 per cent and its service revenue by 10 per cent.
The report added that notwithstanding the environment, in constant currency terms, service revenue grew by 9.7 per cent to R67.9 billion, and Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) expanded by 10.2 per cent 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, while capex intensity dropped further to 16.9 per cent, which has indicated greater efficiency in deploying assets.
Commenting on the financial results, MTN Group President and CEO, Rob Shuter, said: “We had a good first half report on solid financial results; good commercial momentum and encouraging strategic progress. We saw growth of 12 per cent 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 per cent and EBITDA just above 10 per cent, 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 per cent.”
Shuter was quoted in the financial report as saying: “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.
“Our continued focus on the customer experience has seen us record brand Net Promoter Score (NPS) leadership across more than 50 per cent 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.”
Listing its achievements in the first half, the MTN boss said: “We successfully completed the listing of MTN Nigeria on the Nigerian Stock Exchange (NSE), 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.
“Our advanced instant messaging platform, Ayoba, is now live in three of our West African markets, and has more than 300,000 active monthly users. 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.”
Shuter said in South Africa, the group contended with a weak macroeconomic environment as well as the introduction of new end-user requirements and the re-pricing 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 the United States sanctions,” he added.
Looking ahead, Shuter said: “MTN is well positioned to grow by leveraging our scale and enhancing our competitive position. 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. 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.”