MTN Group’s headline earnings back in black in FY17

8 Mar 2018

South Africa-based pan-regional mobile operator MTN Group has reported its financial results for the year to 31 December 2017, with headline earnings of ZAR3.3 billion (USD278.8 million) comparing favourably to a loss of ZAR1.4 billion in FY 2016. Africa’s biggest phone company reported that the figures were helped by the absence of a one-off charge related to the Group being previously fined USD1.1 billion in Nigeria. In its results presentation today (8 March), MTN confirmed that service revenue increased by 7.2% year-on-year to ZAR124.4 billion, driven by a strong performance in Nigeria – the group’s most profitable market – and 3.9% growth in service revenue in South Africa. Meanwhile, units in Uganda, Ghana and Cote d’Ivoire also contributed positively to top-line growth, although MTN Cameroon experienced ‘a particularly challenging year, negatively impacted by the data network shutdown in some parts of the country in the first quarter, as well as regulatory and operational challenges.’ Further, MTN pointed out that rising revenue was also attributable to strong growth in data and digital revenue, supported by stable outgoing voice revenue. Data revenue increased by 34.2% y-o-y, supported by the improved quality and capacity of our data networks in key markets, while digital revenue climbed by 14.2%, in a year in which the carrier added a net 5.7 million active MTN Mobile Money (MoMo) customers.

Consolidated EBITDA stood at ZAR46.9 billion, up 2.5% on an annualised basis, although the EBITDA margin slipped 1.4 percentage points to 34.0%. In its results presentation, MTN noted that EBITDA growth was ‘positively impacted by a one-time profit realised on exercising the right to exchange the group’s interest in Nigeria Tower InterCo B.V. (INT) for a higher shareholding in IHS Holding Limited (IHS). However, this was partly offset by fixed and intangible asset impairments for MTN Sudan and MTN Syria. Full-year CAPEX was almost ZAR31.5 billion, up 2.0% y-o-y, as the Group continued to invest in the rollout of its networks and IT across its markets. MTN deployed a total of 8,583 3G and 8,611 4G co-located sites last year, resulting it said, ‘in a marked improvement in network quality and capacity across a number of our markets’.

As at 31 December 2017, MTN Group had a total of 217.2 million subscribers, based on what it terms its ‘new modernised definitions’, and added that it intends to provide comparisons for full year 2018 using the new baseline figures. In 2017 subscriber numbers in Cameroon in particular were further affected by the disconnection of approximately three million subscribers to ensure adherence with regulations on subscriber registration, while regulatory requirements also resulted in the disconnection of 750,000 subscribers in Uganda.

South Africa, MTN Group