MTN Group reports ‘strong’ FY20 results; unveils ‘Ambition 2025’ strategy

10 Mar 2021

MTN today (10 March) reported its operational and financial results for the year ended 31 December 2020, noting the group’s resilience despite the impact of COVID-19 and a challenging macroeconomic environment. Further, the Johannesburg-based regional carrier unveiled a new strategy plan – dubbed ‘Ambition 2025’ – as it looks to reposition itself, accelerate growth and ‘unlock the value of its infrastructure assets and platforms’.

The Group said it added 28.8 million net new subscribers in 2020, increasing the total to 279.6 million across 21 markets, as consolidated service revenue increased by 11.9% to ZAR170.1 billion (USD11.05 billion) from ZAR141.8 billion in 2019, led by strong growth for MTN Nigeria (up 14.6%), MTN Ghana (up 16.6%) and MTN South Africa (up 1.6%). Voice revenue rose 4.8% year-on-year and data revenue surged 31.0%, with a 110.0% increase in traffic attributed to ‘higher levels of online demand resulting from the effects of COVID-19, including an increase in learn from-home and work-from-home’. At 31 December 2020 MTN had 114.3 million active data users, having added 19.0 million in the year under review. ‘We surpassed the breakthrough 100 million mark in H1 as we continue to work towards our ambition of connecting 200 million data users to our networks in the medium-term,’ it noted. To drive this, the carrier is expanding its 3G and 4G coverage, ‘adding 16.3 million and 55.0 million people respectively to its footprint; invested in 5G in South Africa; recorded 140 million smartphones on [its] network; and reduced the effective rate per megabyte by 32.9%’. The wider availability of 3G/4G – buoyed by CAPEX of ZAR28.6 billion in 2020 – helped average data usage increase by 60% y-o-y to 4.4GB per month.

‘We continued to perform favourably against our medium-term targets,’ said President and Chief Executive Officer Ralph Mupita. ‘In constant currency terms, service revenue grew 11.9% to ZAR170 billion and EBITDA increased by 13.4%, maintaining our strong operating leverage. The Group’s EBITDA margin improved by 0.9pp to 42.7%, benefiting from the execution of our expense efficiency programme.’

MTN also announced a revised business strategy in its report. ‘Further to our previous announcement regarding our intention to focus on our pan-Africa strategy, we completed a comprehensive strategy review in Q4 2020 and are excited to introduce ‘Ambition 2025’… As part of this strategic repositioning, we are looking to structurally separate our infrastructure assets and platforms, such as fintech, to reveal value and attract third-party capital and partnerships into these businesses, over the medium-term.’ In support of the repositioning, MTN plans to invest approximately ZAR29.1 billion in its network, fintech and digital services platforms in 2021.

South Africa, MTN Ghana, MTN Group, MTN Nigeria, MTN South Africa