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MTN Group reports ‘most challenging year’ in its history; revenues flat-line

2 Mar 2017

South Africa’s MTN Group has published its financial results for the twelve months ended 31 December 2016, reflecting what it termed ‘the most challenging year in the company’s 22-year history, precipitated by a number of material regulatory, macro-economic and political challenges experienced across [its] regions [of operation]’. Consolidated revenue increased marginally by 0.4% year-on-year to ZAR146.894 billion (USD11.23 billion), as growth was adversely impacted by the depreciation of its local currency (rand) and the significant depreciation of the Nigerian naira against the US dollar – one of MTN’s biggest African markets – particularly in the second half of 2016. On a more positive note, the carrier reported a net increase of 3.3% in group subscribers to 240.3 million at 31 December 2016 and, despite a difficult trading environment, in its financial statement MTN Group bullishly stated that the business has begun to show ‘encouraging first signs of a turnaround’. The Group said of its prospects: ‘MTN Group continues to work towards achieving our vision of “leading the delivery of a bold, new Digital World to our customers”. Despite the recent disruptions in the markets in which we operate, Africa is still expected to be a key growth region over the medium to long term. MTN’s unique position in Africa and the changes made in 2016 provide a solid platform for the Group to realise its vision.’

MTN Group booked a pre-tax profit of ZAR18.208 billion in FY 2016, down sharply from ZAR36.583 billion in the year-earlier period, and reported a basic headline loss per share of ZAR0.77 attributed in large part to a regulatory fine in Nigeria. As previously reported by TeleGeography’s CommsUpdate, the Nigerian government imposed a NGN330 billion (USD1.0 billion) fine on MTN Nigeria in October 2015 for missing a deadline to disconnect around 5.1 million incompletely registered subscribers. Group EBITDA, meanwhile, declined by 13% y-o-y to ZAR51.981 billion from ZAR59.918 billion; EBITDA margin was 35.4%, compared to 40.9% in FY 2015. Group CAPEX of ZAR34.920 billion marked a 19.6% increase on an annualised basis, and included the ZAR1.39 billion purchase of a spectrum licence in Nigeria, a 4G LTE licence and spectrum in Ghana (ZAR970 million) and 4G LTE and fibre-optic licences in the Republic of the Congo (ZAR266 million).

South Africa, MTN Group

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