MTN returns to the black
Telecommunications giant MTN announced a return to profit in first-half interim results at a presentation on Friday, with total group revenue in constant currency increasing by 6,7% to R64,3 billion and headline earnings per share improving to 217 cents, compared to a 271 cent headline loss per share in the comparable period last year. MTN maintained its interim dividend at R2,50‚ the same as in 2016’s interim period.
This marked a pleasing return to form for the embattled company, which was formed in 1994 and operates in 21 countries across Africa and the Middle East. In 2016, MTN was slapped with a $1,1 billion fine by the Nigerian regulator over unregistered SIM cards and it has also had to contend with foreign exchange challenges and a technical recession in South Africa.
"We are seeing pleasing progress in our key growth drivers of data and digital services against headwinds of challenging macro-economic conditions and foreign exchange currency pressures," MTN CEO Rob Shuter (pictured) said.
The group's subscriber numbers fell 3,6% to 231,8 million, impacted mainly by poor showings in MTN Nigeria and MTN Ghana, but this was offset to some extent by a rise in South African subscriber numbers.
MTN projected data subscriber numbers would grow to 500 million from 200 million by 2020, digital subscribers would grow to 250 million from 150 million, while digital subscribers were expected to reach the 250 million mark in 2020.
The network provider's data revenue has increased by 31,9% (14,4% in South Africa), benefiting from significantly improved data network quality and capacity.
Capital expenditure in the first half of the year was slower than expected, decreasing by 25,2% to R10,3 billion, impacted by limited foreign currency availability in Nigeria, execution challenges and the seasonality of the capital expenditure cycle.
Shuter put some of the progress down to the development of a well-defined growth plan and a review of strategy. Its BRIGHT plan is arranged under six pillars: customer experience, returns and efficiency, commercial performance, growth through data and digital, hearts and minds, and technology excellence.
"We continue to strengthen our focus on operational excellence with our six strategic pillars integrated in our new bright strategy. Our focus during the second half of the year will be to entrench our bright strategy, complete our network investment programme and build medium-term financial KPIs and targets for the BRIGHT strategy," said Shuter.
MTN poached Old Mutual Emerging Markets CEO Ralph Mupita to fill the CFO role in October last year. Mupita, who is a group executive director, took over the reins officially in April.