MTN Group said it balanced an accelerated investment into its networks with the delivery of solid interim financial results for the six-month period ended June 2022.
“Notwithstanding the tough macro conditions, MTN remained focused on investing in our markets to increase broadband coverage and to reduce the cost to communicate,” said president and CEO Ralph Mupita.
“We accelerated network investment to R17.1 billion and spent an additional R7 billion on securing 4G and 5G spectrum in the key markets of South Africa and Nigeria.”
Reported headline earnings per share of 567 cents in the six months period was up 46.5%, from 387 cents a year earlier.
In constant-currency terms, service revenue grew by 14.8% to R92.5 billion; and earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 15.1% to R43.9 billion before once-off items.
Highlights
Group service revenue grew by 12.8%
Group data revenue up by 33.1%
Group fintech revenue up by 9.9%
EBITDA (before once-off items) grew by 13.7%
Basic earnings per share (EPS) at 445 cps, up 200.7%
Reported headline earnings per share (HEPS) at 567 cps, up 46.5%
Return on equity (ROE) improved by 4.6pp to 24.2%
Subscribers increased by 5.5% year-on-year (YoY) to 281.6 million
MTN said there is no interim dividend being declared for H1 2022. The board anticipates paying a minimum ordinary final dividend of 330cps for FY 2022.
MTN South Africa
MTN SA delivered a resilient H1 2022 against a backdrop of rising inflation and unemployment rates, interest rate hikes and currency volatility which placed even more pressure on consumers’ disposable incomes, the group said.
Operating conditions were further compounded by increased incidents of load shedding in the country as well as the impacts of floods across the province of KwaZulu-Natal in April 2022, it said.
In H1 2022, MTN SA delivered service revenue growth of 4.1%, sustaining healthy growth.
MTN said its drive to connect more customers to the network and manage churn led to an 8.9% increase in the number of subscribers to 35.3 million, a net addition of almost 837,000 in the
quarter.
This was supported by an increase of 3.7% in postpaid subscribers to 7.8 million. In H1 2022, prepaid customers decreased by 0.4% to 27.5 million.
MTN SA deployed capex of R3.2 billion in H1 2022 and continued to scale up its 5G offering after the allocation of 3,500MHz spectrum with 443 5G sites rolled out in the period.
This brings the total 5G sites to 1,391, covering nearly 20% of the population, ahead of the December 2022 target.
South Africa Highlights
Service revenue increased by 4.1%
Data revenue increased by 14.6%
Fintech revenue decreased by 0.9%
Wholesale revenue decreased by 0.2%
Digital revenue increased by 8.3%
EBITDA increased by 0.2%
“Growth in data revenue was particularly strong, up 35.9%, driven by MTN Nigeria, MTN Ghana, MTN Cameroon and MTN South Africa,” said Mupita, adding that fintech revenue grew by 14%, with solid performances from Nigeria, Uganda and Ghana.
“The introduction of fintech taxes in some markets slowed revenue growth in Q2, but we remain encouraged by the ecosystem growth as users, agents and merchants continued to grow healthily during the period under review, with transaction volumes growing by 31.5% during the period.”
The total number of MTN subscribers in the period was 281.6 million, up 5.6%.
Mupita said the headwinds facing customers and the business look likely to persist in the second half.
“The business is well positioned to navigate the prevailing market conditions. In South Africa, we are focused on improving the resilience and availability of the network, given the constrained on-grid power situation,” said Mupita.
“Battery and generators solutions will be deployed to restore network availability to the world-class standards our customers have been used to. This resilience plan will be executed within the capital expenditure envelope of the business.
“If we experience the same level of load shedding in H2 as we did in H1 in South Africa, service revenue will come in slightly under guidance, with margins at the lower end of the range communicated to investors.”
Read: MTN surges on strong earnings
