…As telco returns to profit
By Olabisi Olaleye with Agency report
MTN group’s subscribers have reduced by by 3.6 percent to a total of 231.8 million across its 22 operations in Africa and the Middle East.
This interim result was released yesterday by the group for the six months ended June 30, 2017.
According to the telco, it lost more subscribers in Nigeria, with a drop of 14.3 percent to 53.1 million, and Ghana, where the subscriber base declined by 10.3 percent to 17.3 million. However, subscribers in South Africa ticked up by 1.5 percent to 31.2 million.
The biggest drag on customer numbers for the half-year came from the West and Central Africa region, which dropped 8.5 percent to 102.3 million. It stated that the decline was due to an “initiative to modernise subscriber definitions to reflect the business’s changing mix of revenue streams”.
And the implementation of the modernised definitions is still continuing but is expected to be completed by the end of the year.
The group saw headline earnings per share (HEPS) returned to a profit of 217c compared to a 271c headline loss per share reported in the comparable period last year. The previous results were heavily impacted by the group’s Nigerian regulatory fine which reduced HEPS by 474c (454c of the fine fully expensed and 20c of the interest unwind). In the current period, MTN says the Nigerian regulatory fine interest unwind reduced HEPS by 24c.
In June 2016, MTN agreed to a settlement amount of N330 billion ($1.671 billion at the time) to be paid to the Nigerian government in six instalments over three years. This was imposed after it failed to meet a deadline to disconnect 5.1 million unregistered SIM cards on its Nigerian network in 2015.
Group revenue for the first six months of the current financial year decreased by 18.5 percent to R64.3 billion. In constant currency terms, however, revenue grew by 6.7 percent underpinned by 10.8 percent growth in revenue in Nigeria and a 5.2 percent organic growth in service revenue in South Africa.
Group earnings before interest, tax, depreciation and amortisation fell 27.7 percent to R21.2 billion (up 3.1 percent in constant currency terms).
The South African business once again produced strong results “supported by a strong prepaid performance, network expansion and a strengthened leadership team”.
Total revenue in SA increased by 1.6 percent to R20.2 billion. Service revenue increased by 5.2 percent on an organic basis to R16.8 billion, supported by strong growth in data revenue and digital revenue, up 18.5 percent (organic) and 37.6 percent respectively.
Overall subscribers grew to 31.2 million, with prepaid customers increasing by 1.7 percent to 26 million and the postpaid segment showing a slight recovery with the subscriber base ticking up by 0.2 percent to 5.2 million.
Prepaid service revenue increased 9.2 , while postpaid service revenue dropped by 3.9 percent.
MTN Uganda, MTN Ghana and MTN Ivory Coast also contributed positively to the group’s top-line growth, while MTN Cameroon experienced a challenging period, negatively impacted by the data network shutdown in some parts of the country in the first quarter of the year.
MTN says that in constant currency terms, it saw strong growth in group data and digital revenue and stable outgoing voice revenue. Data revenue increased by almost 32 percent to close to R14 billion (up 9.6 percent without constant currency), supported by improved quality and capacity of data networks in key markets. Digital revenue increased by 24.7 percent (down 9.3 percent without constant currency), driven mainly by mobile financial services growth. This as the group added 2.7 million active MTN Mobile Money customers in the first half of the year. Outgoing voice revenue remained flat for the period at R32.8 billion. MTN declared an interim dividend of R2.50 per share.
“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,” says group president and CEO Rob Shuter.