South Africa-based multinational telecoms operator MTN Group, which operates in 22 countries across Africa and the Middle East, has released its financial results for the twelve months ended 31 December 2018. Net profit attributable to shareholders climbed sharply to ZAR8.719 billion (USD613.5 million) from ZAR4.416 billion on revenue that edged up 1.3% to ZAR134.560 billion and EBITDA of ZAR48.246 billion (up 2.7% year-on-year); EBITDA margin was 35.9% compared to 35.4% in FY17. In a filing, MTN noted that service revenue also increased by 10.7% y-o-y, supported by growth in MTN Nigeria (up 17.2%), MTN Ghana (up 23.0%), MTN South Africa (up 4.2%) and MTN Uganda (up 8.9%). However, it also pointed out that MTN Cameroon and MTN Ivory Coast delivered a 7.3% and 6.6% decline in service revenue respectively. ‘Macroeconomic conditions were challenging in the second half of the year, particularly in the Middle East. In Iran, the re-introduction of US sanctions resulted in material currency depreciation and increased inflationary pressures and no further cash was repatriated in the second half. At 31 December 2018, group receivables of ZAR2.8 billion remained in Iran,’ it confirmed.
Commenting on the results, Group president and CEO Rob Shuter said: ‘MTN delivered a very encouraging performance in 2018, meeting our targets for growth in service revenue and EBITDA, as well as those on reducing CAPEX intensity and improving holdco leverage. The group has now delivered eight quarters of continued operational improvements. We continue to benefit from the demographic dividend in the countries in which we operate and, while the markets remain challenging, we continue to target service revenue growth ahead of inflation. In the year we made good progress in resolving key regulatory challenges in markets including Benin, Cameroon and Nigeria. Managing regulatory issues and improving relationships and risk management remains key focus areas for the group, and we will continue to strengthen these areas in 2019.’
As at 31 December 2018 MTN Group reported a total of 233 million subscribers, up by 16 million from the corresponding year-ago period. Growth was fuelled by a solid rise in voice revenue, along with the continued expansion of data-related services and the acceleration in wholesale revenue in Q4 2018, supported by overall service revenue growth. The markets in which MTN operates remain ‘under-penetrated in terms of mobile services’ it says, and going forward, the Group expects to maintain growth in the core voice business over the medium term.
MTN Group has conducted an extensive review of its portfolio to ‘reduce risk, improve returns and simplify’ its group structure. The in-depth study covered both its subsidiaries and its associates, and its investments in e-commerce investments and tower companies. Having concluded it has ZAR40 billion committed in e-commerce and tower company investments, it has now announced that they are not viewed as ‘long-term strategic assets of the group and will be monetised over time’. The group has committed to realise more than ZAR15 billion over the next three years, excluding any proceeds from its ZAR23 billion position in towers group IHS. Further, MTN Group has announced that it would be disposing of its 53% stake in Botswanan mobile operator Mascom for USD300 million; Econet Wireless will acquire the stake.