MTN Group reports continued commercial momentum in the first quarter

MTN Group today announced a positive service revenue trajectory in the first quarter financial results for the year ended 31 March 2020

Speaking on the results MTN Group president and CEO, Rob Shuter said: “The effects of the COVID-19 pandemic on the global economy have brought about unprecedented uncertainty, volatility and challenges which are impacting our markets at both the socio-economic and macro-economic levels. The impact of the pandemic on our quarter one performance was not significant as lockdown restrictions for our consolidated subsidiaries were only implemented from the last week of March 2020.

We continued to build commercial momentum adding 6,6 million subscribers in the quarter, with active data users increasing by 2,9 million and MoMo subscribers by 0,4 million. We continued to scale our Ayoba platform recording 2,6 million monthly active users. We accelerated our MoMo agency network in Nigeria, under our super-agent licence, adding 70 000 agents in the first quarter, bringing the total number of registered agents to 178 000.

On strategic progress, the digital business returned to growth, booking 15.6% in the quarter. In MTN SA the enterprise business recorded its second quarter of growth and in May we commenced phase 2 of the national roaming agreement with Cell C and look forward to a continued partnership.

In these difficult times we continue to focus on our key priorities: looking after our people, our customers and our networks while we focus on efficiencies. For our people, the immediate priority is their health and safety, where the work-from-home programmes across our markets empower our staff to work remotely while ensuring continuity in our operations. For our customers, we have ramped up our digital channels as a service alternative, to enable them to continue purchasing airtime and accessing our products and services seamlessly as well as launching Y’ello Hope Packages in most of our markets.

Our various initiatives support governments across our markets with communication systems and connectivity as we do our part to help minimise the economic and social impact.

The COVID-19 situation is an evolving one and will undoubtedly impact the year ahead. Given the uncertainties associated with the duration and economic impact of the pandemic, it is difficult to reliably quantify the direct and indirect financial impacts on the business at this early stage. The group will continue to focus on business continuity and efficiency, and we have implemented strict measures to preserve resources and strengthen our resilience.”

Financial Performance

For the first quarter, MTN delivered a solid performance increasing constant currency service revenue by 11,1% and EBITDA by 15,6% with EBITDA margin improving by 2,1pp to 43,2%, in line with medium-term targets. The group recorded voice, data and fintech revenue growth of 6,3%, 26,4% and 26,0% respectively as we continued to execute on our strategic objectives and progress toward becoming a digital operator. Digital revenue has returned to growth, increasing by 15,6%.

MTN Group CFO, Ralph Mupita concluded, “We are encouraged by the service revenue growth of 11.1% which we achieved on a constant currency basis, this translated to 16.5% on a reported basis. Good cost control across the group supported the increase in group EBITDA margins, with a particular strong performance from MTN Ghana. Notwithstanding the impacts of COVID-19 in the first quarter, the balance sheet remained resilient and our cash and committed undrawn facilities was approximately R45 billion at the holding company level, providing us with sufficient liquidity during these uncertain and unprecedented times.

We have experienced a continued surge in data traffic during the month of April, but voice traffic and mobile money transactions were under pressure given various lockdown measures taken across markets. Where lockdown measures have been lifted or relaxed recently, voice recharges and mobile money transaction volumes have improved. For now, we are maintaining our 3 – 5 years medium-term guidance but will update the capital markets in August of any changes when we release our H1 2020 results.”

Looking ahead

The current environment is marked by significant uncertainties. It is still too early to assess the economic impact of the pandemic on our customers and reliably quantify the direct or indirect financial effects on our business. The remainder of the year will be shaped by the ramifications of the pandemic, and we will continue to update all stakeholders as the effects become clearer.

We are not only focused on managing the risks brought about by COVID-19, but also on the opportunities it creates in the accelerated digitalization it has brought about. We believe we are well positioned as a company to benefit from this evolution, especially given our focus on growth in our data, digital and financial services businesses. The Group remains focused on the execution of our BRIGHT strategy to deliver sustainable growth in our operations and value to our stakeholders.

MTN Asks U.S. Court to Dismiss Anti-Terrorism Case

MTN Group (MTN) has asked a United States court to terminate the case filed against it on December 27, 2019, asserting claims for civil monetary relief under the U.S. Anti-Terrorism Act.

As stated in the formal written document submitted to the U.S. court by MTN’s legal counsel, entitled a “motion to dismiss,” MTN requested the court to end the lawsuit and grant a judgment in MTN’s favour for two independent reasons: because the court lacks jurisdiction over MTN, which does not operate in the United States, and because the complaint does not allege any conduct by MTN that would have violated the Anti-Terrorism Act.

Under U.S. law and procedures, MTN is not permitted at this stage of the lawsuit to challenge or contest the factual allegations made against the company, so the motion to dismiss focuses on the lack of jurisdiction and the legal insufficiency of the claims.

MTN has deep sympathy for those who have been injured or lost loved ones as a result of the tragic conflict in Afghanistan. As stated in the motion to dismiss, however, “the MTN Defendants are not the extremists that caused Plaintiffs’ tragic losses and injuries. To the contrary, MTN Afghanistan has been lauded by the World Bank for expanding telecommunications services to the impoverished people of Afghanistan and has itself been a target of violence in the devastating conflict in that war-torn country. Put simply, Plaintiffs have sued the wrong defendants in the wrong court based on insufficient allegations.”

MTN remains of the view that it conducts its business in a responsible and compliant manner in all its territories and, as reflected in the motion to dismiss, intends to defend its position accordingly.

MTN Group ranked Africa’s top telecoms brand

MTN has been awarded the most valuable telecom brand in Africa in a recent annual report by Brand Finance, a leading independent brand valuation consultancy. The report stated that MTN’s brand value was boosted by a solid overall performance for the year, despite challenging economic conditions and regulatory challenges in some markets.

Brand finance also recognised MTN for its focus on customers and providing a high-quality service across all its markets. “Amid these unprecedented times in fighting a global pandemic, MTN Group is humbled by the Brand Finance recognition and our progress in rising up through the ranks of this year’s Telecoms 150 report” said MTN President and Group CEO, Rob Shuter.

Brand Finance CEO, David Haigh commented: “MTN is to be commended for its performance in its home market as well as further afield. They are increasingly recognised throughout Africa by their customers as providing high quality service, because their brand image is deeply rooted on more than just marketing campaigns”

Brand Finance acknowledged MTN’s BRIGHT strategy to grow revenues through data and digital, while also focusing on growing its subscriber base. It upgraded MTN’s brand strength rating from AAA- to AAA, in recognition of an increasingly strong leadership position in telecommunication services throughout Africa and the other markets within which it operates, as well as increasingly resilient network investments.

The report noted a negative global impact on the brand value of the world’s biggest telecom companies which are set to be impacted by the Coronavirus outbreak.  “We have built a sound, robust and resilient organisation that can and will weather the storm before us. As a Group, we are taking the decisive steps required to persevere in our MTN spirit of togetherness and a positive, can-do attitude,” concluded Shuter.


MTN Group releases 2019 integrated, sustainability and tax reports

MTN Group today published its Group Integrated, Sustainability and Tax Reports for the year ending 31 December 2019, illustrating the significant economic and social impact it has delivered through the group to the markets it operates in across Africa and the Middle East. The three reports set out how the company delivered growth and unlocked value by continuing to focus on executing its BRIGHT strategy. They also show how MTN operations strive to ensure that all who are touched by our products and services are positively impacted.

Delivering on our strategy in a more agile way

Our 2019 Integrated report highlights the progress we have made against our strategy and the value created by developing and distributing a range of innovative and reliable communication products and services. We also share our intention to harness the pioneering spirit MTN has built over the last 25 years to accelerate the implementation of our strategy in a more agile way in close collaboration with our many partners, with whom we are #GoodTogether.

Key highlights:

  • The work we have done on strengthening our operations and balance sheet over the last few years positions us well to weather the more turbulent operating environment.
  • Given the progress and momentum we have seen in our commercial, strategic and financial initiatives, we have enhanced our medium-term guidance framework.
  • While we maintain our service revenue growth, EBITDA margin improvement, capex intensity reduction and ROE improvement targets, we have increased our targets for the next three to five years to secure at least a further R25 billion in asset realisations which will further moderate our leverage ratios.

Contributing to infrastructure and government revenue

The infrastructure we build supports the development of the technology which boosts local economies. MTN invested R26 billion in its networks and systems in 2019. MTN is also among the largest taxpayers in many of our markets and MTN’s tax contributions for the year under review amounted to R31 billion, up from R24 billion in 2018. Tax contributions include corporate taxes, indirect taxes, withholding taxes, payroll taxes, operating licence fees and other payments to government authorities.

This stemmed from contributions made in South Africa of R4,6 billion, Nigeria of R6,7 billion, SEAGHA of R9,3 billion, WECA of R6,7 billion and MENA of R3,2 billion.

PwC Building Public Trust Award

Our 2018 tax report was selected from the tax reports of the top 100 JSE listed companies. An independent panel of judges reviewed the tax reports and MTN was awarded first place for the PwC Building Public Trust Award amongst South African based multinational companies. This award is given for excellence in tax reporting.

Driving broader socio-economic benefits to society

“To make an impact on meeting the UN SDGs by 2030, we need to deepen our focus, acting collectively and decisively. Having often reflected on this objective, I believe we can achieve this if we come together through our connected and shared humanity to collaborate effectively through partnerships,” said MTN President and Group CEO Rob Shuter.

“What we are most proud of are the partnerships we have made and the impact they have had. Three in particular come to mind: 1) Rapid rural roll-out programme (R3) with our various partners, in 2019 we saw over 1300 sites reaching 6,9 million people, 2) Internet Watch Foundation partnership to make children safer online, we successfully blocked 2 million URLs containing child sexual abuse material, 3) Signing up to the GSMA-led industry-wide plan to achieve net-zero GHG emissions by 2050  in line with the Paris Agreement.”

We view sustainability as an integral part of MTN’s value creation journey now and into the future. We strive to create and protect shared value for our stakeholders through responsible economic, environmental and social practices. Key points from the 2019 Sustainability report are as follows:

  • Environmental: MTN recorded its highest ever greenhouse gases saved/avoided at 28 889 tonnes of carbon dioxide equivalent (tCo2e) in 2019, despite an increase in our energy consumption due to the growth in our network.
  • Social: We reached over 1,9 million beneficiaries through our Corporate Social Investment across our footprint, over 400 000 of which were women and over 300 000 youth.
  • Governance: MTN adheres to a culture of sound ethical business conduct – over 10 000 ethics e-learning completion by staff, over 1 800 vendors prequalified following due diligence process and over 130 calls to tip-offs anonymous whistle-blower line, a significant increase from previous years.
  • Economic: Through our CHASE model, we are driving smartphone adoption with over 675 000 affordable low-cost smartphones distributed in 2019 alone. We also witnessed a 39% reduction in the group’s effective rate per megabyte.

Rob added that: “Access to the internet has the power to change lives and bridge inequalities, we are contributing to accelerating digital and financial inclusion by connecting the unconnected. We believe that by contributing to the prosperity of Africa and the Middle East, we are creating shared value for all.

Another key example of this: MTN’s Mobile money and Homeland solutions which are not only facilitating the flow of money into Africa from the Diaspora, but between different regions in Africa, setting the stage to enable African Continental Free Trade Area’s vision of creating a single market across the African continent.” 

MTN’s response to COVID-19

As business and society, we are seeing a concerning increase in the transmissions of COVID-19 cases across multiple countries. To mitigate its impact, we are implementing several measures to support our employees, customers, partners, communities and our business during this time of uncertainty for all of us. These measures include the establishment of a Global Staff-Care Emergency Fund which will be utilised for preventative health and safety, treatment, and emergency lockdown sustenance provisions. We are also rolling out relief products and services under the ‘Y’ello Hope Crisis Package’ umbrella across MTN to enable customers to access critical health and education information, and mobile money services. Our investment focus at this time is on resilience and capacity in our networks.

“As I write, we are in the midst of the COVID-19 pandemic and there is much uncertainty as to how and when society will emerge from it. The impact of COVID-19 on worldwide economies is challenging and our commitment remains steadfast to do all we can to minimise the economic and social impact across our markets. MTN Group cares because MTNers care – we have dynamic and passionate employees who continue to empower us to reach new heights in our journey,” concluded Rob.

Click here to access the reports.

MTN South Africa announces outcomes from engagements with the Competition Commission

Further to the announcements on 4 December 2019 and 12 December 2019, MTN SA has today announced the outcomes from its engagements with the CompCom and response to its Data Service Market Inquiry. MTN SA has developed a set of voluntary undertakings in the form of a social compact to further address the affordability of data services for its customers and MTN remains in discussion with the CompCom on the options to formalise these elective solutions and the implementation thereof.

Included in these initiatives are three areas which focus on deepening MTN’s ongoing drive to reduce the cost to communicate. These are: the affordability of monthly prepaid bundles, lifeline data and the zero-rating of data for public benefit service websites.

Click here for further details:

MTN completes the sale of ATC joint ventures for R8,9 billion

Our asset realisation programme (“ARP”), introduced in March 2019, aims to reduce debt, simplify our portfolio, reduce risk and improve returns.

Subsequent to MTN Group’s announcement on 11 March 2020 reporting its 2019 annual results and the conclusion of the disposal of its stake in ATC Uganda for R2,2 billion, MTN confirms that regulatory approvals have now been received for the disposal of its stake in ATC Ghana. MTN is due to receive further transaction proceeds of approximately $384 million (R6,7 billion, based on an exchange rate of R17,4:$1) in the next week. This takes the total proceeds received for the disposal of both ATC Uganda and ATC Ghana to R8,9 billion, which will be applied to paying down US-dollar debt and general corporate purposes.

Click here for further details:

COVID-19: Keeping you informed

Regrettably COVID-19 or “Coronavirus” has become a global pandemic.

This is new territory for all of us. We are navigating this together – summoning all the information we have, sharing what’s new in real-time and asking everyone in our global community to recognise that we will get through this together – with resolve, compassion and care. This is an extraordinary time, a time when as MTN we need to stand up and be counted on to do the right thing. COVID-19 is affecting nations and citizens all around the world.

We have taken a series of precautionary measures to ensure the safety of our stakeholders

Unfortunately, all indications are that it is going to continue to spread across the world and in our markets – and we need to be prepared for that. We have taken a series of precautionary measures to ensure the safety of our stakeholders including employees, customers, communities and suppliers from the pandemic. Furthermore, we have and continue to develop communication to keep our various stakeholders informed of how we are responding to the pandemic.

MTN COVID-19 communication

Message from the MTN Group President and CEO
COVID-19: MTN precautionary measures for stakeholders
Frequently asked questions

MTN reports strong financial results and CEO succession process underway

MTN reports commercial momentum, strategic progress and strong financial results; CEO to step down next year, succession process underway

MTN Group today announced an encouraging set of results for the year ended 31 December 2019 and that group president and CEO Rob Shuter would be stepping down from his role at the end of his contract in March 2021.

Commenting on the results, Shuter said:

“In 2019, the 25th anniversary of MTN Group, we delivered commercial momentum across our operations as well as great progress in our strategy and strong financial results, despite challenging trading conditions.

We added 18 million customers to reach a total of 251 million and increased our data users by 17 million to 95 million and our fintech customers by 7 million to 35 million. This growth is central to our belief that everyone deserves the benefits of a modern connected life. We also saw improvements in customer experience, network quality and market share across the group.

On the strategic front, we launched our instant messaging platform Ayoba, which is now live in 12 markets with two million monthly active users. We launched MoMo in South Africa and Afghanistan and received our super-agent licence in Nigeria, registering more than 100 000 agents by year-end. We also delivered R14 billion of asset realisations within the first 12 months of our programme and MTN Nigeria listed on the Nigeria Stock Exchange. We recorded progress on various regulatory issues, including the AGF tax matter in Nigeria. Relationships with stakeholders across our markets improved, and we reported our highest employee sustainable engagement score yet.

On the financial side, we delivered service revenue growth of 9,8% with an acceleration in the second half. Our EBITDA margin improved and reported headline earnings per share grew by 62%. Our network rollout brought a further 69 million people into 4G coverage whilst reducing capex intensity.  Improved cash flows during the year supported stable balance sheet ratios.”

Operating environment

This outcome was delivered against challenging macroeconomic conditions, particularly in South Africa, with muted economic activity and the rand weakening against the US dollar.

Financial performance

In constant currency terms, group service revenue increased by 9,8%* to R141,8 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) expanded by 13,6% to R53,4 billion. The holding company leverage ratio improved to 2,2x, which is well within the group’s guidance range of 2,0 to 2,5x, and we reduced our capex intensity to 17,5% from 19,3%, indicating greater efficiency in deploying assets. Driven by the strong earnings performance, operating cashflow increased by 18% and the ROE increased from 11,5% in 2018 to 14,3% in 2019 on an IAS17 basis.

The group’s results were supported by double-digit growth in service revenue by both MTN Nigeria and MTN Ghana. The performance of MTN South Africa was impacted by economic pressure, new data usage rules and changes in recognition criteria for roaming revenue from Cell C due to delayed payments under the networking roaming agreement.

Management succession

MTN announced that the group president and CEO Rob Shuter will be stepping down from his role at the end of his contract in March 2021. The board thanks Rob for the contribution he has made, and continues to make, to MTN. The succession process will be concluded during the year, enabling a seamless handover.

MTN group chief technology and IT officer Charles Molapisi has been appointed to the group executive committee and the fixed contract of the group chief operations officer, Jens Schulte-Bockum, has been extended until 31 March 2022.

Looking ahead, Shuter says:

“We are well positioned for growth. Guided by our well-defined BRIGHT strategy, we are building our growth strategy on our digital operator model while optimising efficiencies, capex and cashflow.

Following data price reductions in South Africa and Nigeria in 2019, we expect price elasticity to improve data revenue growth in 2020, supported by expanded 4G coverage in Nigeria and across the group. We will continue to scale up our fintech and digital services as well as grow our enterprise and wholesale businesses.

We have maintained our service revenue, EBITDA margin, capex intensity and ROE targets and increased our asset disposal target by a further R25 billion over the medium term. We also now target a holding company leverage ratio at below 2x. We will use 2020 to implement our succession process and ensure a seamless handover to the new group president and CEO whilst maintaining our operational execution.

Inspired to harness the pioneering spirit that has built MTN over the last 25 years, we remain committed to delivering on our strategy in a more agile way in close collaboration with our many partners, with whom we are #GoodTogether.”

MTN Group commits to bridging the gender divide

MTN Group has signed the United Nations Women Empowerment Principles, pledging its commitment to the advancement of Gender Equality and the Empowerment of Women, at MTN’s International Women’s Day event.The Principles provide guidance on how businesses in all sectors can advance and empower women in the workplace, marketplace and community. MTN Group purposefully operates to ensure that everyone deserves the benefit of a modern connected life. To guarantee this, the Group strives to ensure that men and women benefit equally from ICT thereby assisting to reduce inequalities that exist across its footprint.

Gender Empowerment is a key strategic component of MTN’s Corporate Social Investment across its footprint. Significant contributions have been towards the empowerment and development of girls and women in the countries in which we operate. Initiatives include enabling access to ICT and building capacity of girls and women in coding, robotics, programming & computer assembling.

According to the GSMA Mobile Gender Gap Report 2019, women in low- and middle-income countries are 10% less likely than men to own a mobile device, and 23% less likely to make use of the internet, as compared to their male counterparts. “MTN Group commits itself fully to the Women’s Empowerment Principles, as this has the capability to transform lives across the continent and beyond,” said Rob Shuter, MTN President and CEO, MTN Group. “If the mobile gender gap is not addressed, women risk being left behind as societies and economies digitise.  Importantly, we are honoured to be part of the pledge, which also supports African Union’s focus on driving women’s financial and economic inclusion, gender-based violence and accountability to global gender commitments,” he added.

Through this pledge and strategic partnerships, MTN intends to meaningfully respond to barriers that arise from ICT and address inequalities that hinder girls and women from fully participating in and benefiting from the bold, new digital world. And to ensure girls and women have the necessary skills and knowledge to understand, develop content, participate in and benefit fully from ICTs and their applications.

MTN commends the deliberate commitment made by the African Union to bridge the gender gap on the continent. We share the view that women should be enabled to play a meaningful role in developing our continent.

Summary of MTN Ghana consolidated annual results for the year ended 31 December 2019

MTN Ghana (Scancom PLC or MTNGH or the Company) delivered a strong performance for the year in a competitive industry, maintaining market leadership with 55.21% market share. Service revenue increased by 22.8% year-on-year (YoY), underpinned by growth in revenue from voice, data and Mobile Money (MoMo).

Double-digit growth in voice revenue (up 19.4% YoY) was driven by an increase in the number of active subscribers* (+11.2%), the benefits of various customer value management (CVM) initiatives and pro-consumer activity, as well as continued improvements to our network. As new lines of revenue continued to grow much faster than the traditional business, voice revenue’s contribution to service revenue decreased from 46.3% to 45.0%.

Solid data revenue growth (up 32.5% YoY) was attributable to growth in active data users# (+26.6%), growth in the number of smartphones (+18.5%) on the network and an increase in data usage (up 85.9% to 256,301 Terabyte). Data revenue’s contribution to service revenue expanded from 26.3% to 28.4%.

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Further reading