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MTN Group net income slumps 37% in 2015

4 Mar 2016

South Africa-based regional mobile operator MTN Group has reported a 37% drop in attributable net profit to ZAR20.204 billion (USD1.296 billion) for the year to 31 December 2015, down from ZAR32.079 billion in FY 2014, attributed in part to an ongoing battle with regulators in Nigeria over a sizeable fine it is disputing, weak macroeconomic conditions and hyperinflation issues in markets such as Sudan, which it says have been compounded by a string of investments in internet and tower companies. As reported by CommsUpdate, late last month MTN Group announced that its Nigerian mobile unit had withdrawn its lawsuit against the local telecoms regulator and has made a ‘good faith payment’ of NGN50 billion (USD253 million) to the federal government with a view to reaching a possible settlement. In January the Federal High Court in Lagos adjourned MTN Group’s legal challenge of a NGN780 billion fine MTN Nigeria received from the Nigerian Communications Commission until 18 March 2016, in order to enable the parties to try to settle the matter out of court. The fine was handed down last October after MTN failed to meet a deadline to deactivate unregistered user accounts.

MTN Group’s consolidated revenue inched up 0.1% year-on-year to ZAR147.063 billion, but EBITDA declined 19% to ZAR59.125 billion. There was a 4.1% y-o-y increase in the group’s aggregate subscriber base to 232.5 million across 22 markets, despite the disconnection of 10.4 million subscribers to ensure compliance with regulatory registration requirements in Nigeria (6.7 million) and Uganda (3.7 million). Subscriber growth was achieved through ‘attractive segmented below-the-line campaigns and an increased focus on the customer experience enabling the Group to maintain its leadership position in 15 markets’. Nevertheless, the company said the FY 2015 results reflected a difficult and challenging business climate: ‘Weak macroeconomic conditions, increased market competition, heightened regulatory pressures, notably in Nigeria, and operational challenges in some of our markets resulted in a lower-than-expected performance.’ MTN Group net debt ballooned to ZAR31.635 billion last year from ZAR4.543 billion in 2014, due to dividend payments, CAPEX, the acquisition of a 4G LTE licence in Nigeria and other licence renewals across the continent.

In 2016 MTN Group has set out its stall to improve the quality of its network and coverage in key markets such as Nigeria, South Africa, Iran, Ghana, Cameroon, Cote d’Ivoire and Uganda. It is also preparing to ramp up its broadband activities by rolling out LTE and LTE-A in Nigeria, South Africa, Ghana and Cameroon, and deploying fibre-to-the-home (FTTH) in South Africa, Nigeria, Ghana and Iran.

Ghana, Iran, Nigeria, South Africa, Uganda, MTN Ghana, MTN Group, MTN Irancell, MTN Nigeria, MTN South Africa, MTN Uganda

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