MTN Group reports resilient overall results
for the first nine months of 2022 under difficult macroeconomic, geopolitical
and regulatory conditions across its markets due to the solid performance of its significant
subsidiary MTN South Africa.
The Group also recorded an increase in its subscriber
base by 6.8% to 285 million; its fintech business's customer base also
rose by 23.3% to 63 million, and fintech transaction volumes increased by a
third to 9.5 billion.
In a statement issued on MTN Group's official website, it
revealed that MTN South Africa, which is the second largest contributor to MTN
Group service revenue after MTN Nigeria, grew subscriber numbers by more than
800,000 or 8.1%, to 35.9 million in the period to 30 September 2022, adding
that service revenue growth of 3.5% was impacted by load shedding and revenue
concessions that supported the recapitalization of national roaming customer
Cell C.
"MTN South Africa's enterprise business continued to
expand, delivering service revenue growth of 19.7%. The consumer postpaid
business was resilient, with a growth of 4.2%. The rising cost of living and the
impact of load shedding was felt most acutely in the consumer prepaid market,
where service revenue grew by 0.4% in the period."
MTN Group President and CEO Ralph Mupita said that amid unprecedented load shedding, which negatively affected
network availability, MTN South Africa expanded market share, delivered
encouraging underlying service revenue growth, strong expense controls, and
investment in network resilience, and expanded the 5G coverage.
According to him, supported by an increase in smartphone penetration,
MTN South Africa continued to make data more affordable: the effective data
tariff was reduced by 23.4% year on year.
"This helped stimulate usage for both prepaid and postpaid subscribers.
Work and network resilience and availability progressed well, but persistent
load shedding in the last quarter of the year could impact revenue growth,
particularly in the consumer prepaid market," he said.
The statement further noted that MTN Group's listed
subsidiaries in Nigeria, Ghana, Rwanda, and Uganda had released detailed third-quarter
trading updates over the past week. These operations contributed to the overall increase of 14.3%,
in constant currency, to R144 billion in MTN Group service revenue; strong
growth in data traffic and fintech transaction volumes; and the expansion of
the Group EBITDA profit margin to 45.3% in an environment of elevated energy
and general inflation.
The
Group maintained a strong balance sheet with the early partial settlement of
US$300 million of 2024 Eurobonds, resulting in lower hard currency debt
and reducing the holding company leverage to 0.8x. The Group's liquidity remained strong with cash and committed undrawn facilities totalling
R59 billion. Cash upstreaming of R11.5 billion from operations in the
first nine months of the year was further improved, with R1.5 billion in
cash repatriated from Nigeria in October 2022 after the period closed.
In
line with our Ambition 2025 strategy, the Group announced progress with Middle
East exit plans, having entered into agreements with M1 New Ventures to dispose
of the shareholding in MTN Afghanistan for a gross consideration of
US$35 million, subject to transition agreement and regulatory approvals.
MTN
Group also reported progress with its process of a strategic minority investment
into the Group fintech business, noting that it was now in the binding offer
phase and expecting outcomes in early Q1 2023.
"We are encouraged by the growth and expansion of the fintech ecosystem
as we see robust transaction volumes driven by growth in customers, agents, and
merchants," said Mupita. "In the near term, revenue
growth has been impacted by new taxes in a few markets, but we continue to see
the case for structural and compelling growth for fintech services in the
medium term that will deepen financial inclusion across Africa."
As
to the outlook for the rest of the year, Mupita said it remained challenging
given the difficult geopolitical conditions and the macroeconomic environment
globally but that MTN Group was well positioned to withstand any shocks or
take advantage of growth and value-creating opportunities that may arise.
By: Kanto Okanta
