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Tag: Financial Reporting
MTN Group today reported a strong performance for the first half of 2021: exceeding most medium-term targets; reducing debt; advancing digital and financial inclusion; and cutting the cost to communicate across Africa. The Group also called for vaccine equity amid a deepening divide between countries that have access to vaccines for their people and those that do not.
“Notwithstanding the many challenges presented by the COVID-19 pandemic, MTN delivered a solid H1, exceeding most of the Group’s medium-term targets through sustained commercial momentum as we executed on our Ambition 2025 strategy,” said MTN Group President and Chief Executive Officer Ralph Mupita.
We continued to prioritise the health of our people, as well as sustain initiatives to support Africa’s recovery from the pandemic’s devastating impacts on lives and livelihoods. By 12 July 2021, we had 2 452 COVID-19 infections across our operations and mourned the loss of 18 MTN employees. By that date, just over 8% of our staff had been vaccinated with at least one dose.
“We add our voice to the calls by the World Health Organisation and the Africa CDC for COVID-19 vaccine equity for developing markets. The push for herd immunity across the world and a return to broad-based socio-economic global growth will not be possible while developing markets battle to access vaccines,” said Mupita. “Public private partnerships focused on a sustainable future for our planet will be critical to successfully navigate this pandemic.”
With the launch of the #OneMorePush campaign in July, MTN Group extended our partnership with the Africa CDC. This campaign encourages people to not give up in the fight against COVID-19 and to continue to wear their masks, wash their hands and practise social distancing, at a time when vaccination levels in our markets still lag those in developed countries.
At the end of June 2021, across our 21 markets MTN Group had more than 277 million voice subscribers; 117 million active data customers; almost 49 million active Mobile Money users; and eight million users of our instant messaging platform ayoba.
In constant currency terms, service revenue increased by 20% in H1 to almost R82 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) before once-off items increased by 24% to nearly R39 billion. The Group’s EBITDA margin expanded by 1.6 percentage points to 44.9%.
Reported headline earnings per share (HEPS) declined by 10%, impacted by non-operational and once-off items, which included accounting adjustments related to our Middle East portfolio as well as material COVID-19 donations. Excluding these, adjusted HEPS increased by 31.5%. This supported the further expansion of adjusted return on equity, which was up by more than four percentage points to 18.3%. In line with previous guidance, no interim dividend was declared.
We made good progress in reducing our holding company debt, which declined to R36.7 billion from R43.3 billion, and the holdco leverage reduced to 1.4x in the half. This was boosted by cash inflows received from our operating companies of R9.3 billion, which included R4.0 billion from Nigeria, as well as R1.8 billion in proceeds from the sale of our stake in Belgacom International Carrier Services.
We advanced our work to create shared value, driven by our belief that everyone deserves the benefits of a modern connected life. We added approximately R50 billion of economic value to sustain societies in our markets; increased the number of people covered by broadband by more than 25 million; and reduced the average effective data rate per megabyte across our markets by more than 17%. We also paid cash taxes of R7.2 billion in support of the nation states in which we operate, up 47% year-on-year.
We made progress in efforts to reach net zero emissions by 2040, including working closely with our suppliers to reduce our scope 3 emissions. To accelerate diversity and inclusion, we set a target of 50% women representation of executives and boards across our operating companies.
Our April 2021 bid for a new telecom licence in Ethiopia was unsuccessful. Our bid took into account the licence conditions as well as related uncertainties. We had also adopted a partnership approach to ensure that funding and risk was diversified. While disappointing, we are comfortable that our approach was guided by disciplined strategic and capital allocation frameworks. The Group has decided not to participate in the new liberalisation processes underway in Ethiopia, and we thank the Ethiopian government for the opportunity to have been part of the previous process. We also thank the partners we had in our unsuccessful licence bid.
We announced our decision to abandon the MTN operation in Syria given regulatory actions and demands that make operating in that country untenable. We reserve our rights to seek redress through international legal processes given the actions of the Syrian authorities that have left us with no other choice than to exit. MTN Syria represented less than 1% of MTN Group EBITDA at the end of 2020. In line with our focus on Africa, we continue to explore options to exit Yemen and Afghanistan in an orderly manner.
MTN Group today announced a strong and resilient operational and financial performance in the first quarter of 2021, with growth in service revenue exceeding medium-term guidance, driven by gains in data and fintech revenue.
“The MTN Group has delivered a solid Q1 2021 trading performance, with service revenue and EBITDA margins expanding on the back of continued commercial momentum and resilient networks,” said MTN Group President and Chief Executive Officer Ralph Mupita, adding that the Group’s Ambition 2025 strategy had gained execution traction during challenging COVID-19 macroeconomic conditions in the quarter.
In constant currency terms, service revenue grew by 17.8% to R42.3 billion at end-March 2021, earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 21.3% and the EBITDA margin widened to 44.2% from 42.7%.
“The overall Group results were supported by double-digit service revenue growth from our large operations and continued focus on our expense efficiency programme. We are encouraged in particular by the strong performance of MTN South Africa, as well as accelerating data and fintech services across the group in the period,” he said.
MTN South Africa (MTN SA) recorded strong performances across the consumer, enterprise and wholesale businesses. Underpinned by market share gains and a subscriber base of 32.1 million, an 11.8% increase in service revenue and good cost containment drove a 3.2 percentage point expansion in MTN SA’s EBITDA margin to 39.8%. MTN Nigeria and MTN Ghana – both of which reported Q1 results in the past week – continued to build on their solid operational execution and commercial momentum.
Group data revenue grew by almost a third amid sustained demand for work-from-home services, digital entertainment as well as online education offerings. Fintech revenue also accelerated, expanding by more than 31% as the value of fintech transactions increased by 87% to US$53 billion.
“We are pleased with the momentum in driving our platform strategy and the fintech separation project is progressing well, in line with our Ambition 2025 strategy,” said Mupita. “MTN Rwanda recently received a licence to operate a separate fintech entity, bringing the number of structurally separated entities to 12 (out of 16 fintech markets). We continue to progress our work in establishing the Topco structure for fintech, and anticipate that this will be concluded before Q1 2022.”
The Group’s strong overall performance was despite a 1.7 million decrease in subscriber numbers to 277.9 million as MTN Nigeria’s subscribers declined because of restrictions on all new SIM sales and activations in that market. The Group’s active data subscribers increased by 1.3 million to 115.6 million and the number of MoMo customers increased by 0.2 million to 46.6 million. Excluding the impacts of MTN Nigeria, MTN Group total subscribers increased by 3.4 million.
COVID-19 continued to impact lives and livelihoods across the world, including at MTN. By 31 March 2021, the Group had reported 1 557 COVID-19 infections and mourned the loss of 11 MTN employees to the virus across our markets. We continue to prioritise the health and safety of our people.
Alongside equity partners, in April we submitted a bid for one of two telecoms licences to operate in Ethiopia, Africa’s second most-populous country which represents the last and largest telco liberalisation opportunity in the world. MTN’s participation in the bid process aligns with our pan-Africa focus and capital allocation framework.
The Group remains committed to its asset realisation programme (ARP) and is confident of making progress on realising the 29% stake in tower company IHS Group in the short term. This is key to MTN’s ARP. IHS continues to explore an IPO of its shares in line with its public statement made in August 2020.
“Looking ahead, we are focused on executing our Ambition 2025 strategy, driving growth, de-leveraging the Holdco balance sheet and unlocking value, whilst navigating the impacts of the pandemic,” concluded Mupita.
MTN Group today publishes our suite of 2020 reports – including the Integrated, Sustainability, Transparency and Tax Reports – covering how the Group performed in the year and how we delivered on our commitments to stakeholders.
“2020 was unprecedented in the challenges and opportunities that the COVID-19 pandemic created across the markets we operate in. In the year, the Group focused on building resilience and sustainability and positioning the business for accelerated growth given the digital acceleration occasioned by the pandemic,” comments MTN Group Chairman Mcebisi Jonas.
The reports detail the impact of COVID-19 on our markets and business; the Group’s support to stakeholders in these challenging times; our work to manage the risks of pandemic; and our plans to make the most of the opportunities. These factors played a part in shaping MTN Group’s repositioned strategy, Ambition 2025: Leading digital solutions for Africa’s progress, which is detailed throughout our reports.
MTN Group’s 2020 Integrated Report tells the MTN value-creation story clearly and concisely, reflecting integrated thinking. Enhancements to the report this year include a thorough discussion on the new strategy, as well as dedicated sections on COVID-19, the Group’s outlook and our key issues.
Under the new Ambition 2025 strategy, one of the Group’s four priorities is to ‘create shared value’, with environmental, social and governance (ESG) principles at the core.
“COVID-19 has exacerbated underlying economic and social inequalities and is unfolding at the same time as a mounting climate crisis. As a result, instilling sound ESG principles is fundamental to building resilience and ensuring that MTN is future-fit and plays its role in building sustainable societies,” says MTN Group President and Chief Executive Officer Ralph Mupita. “Diversity and inclusion are important aspects of future sustainable societies and although we have made good progress with greater representation of women at senior levels in the company, there is still a lot of work to do.”
The Sustainability Report details our commitment to reach net zero emissions by 2040, as well as the naming of Nkululeko Sowazi, chair of the MTN Group Social and Ethics Committee, as the MTN Group designated Board member responsible for ensuring climate risks and opportunities are appropriately addressed within the company.
In 2020, MTN Group advanced digital and financial inclusion by reducing by a third the cost to communicate and enabling over $152 billion of transactions through extending Mobile Money services for customers and small and medium enterprises.
By investing nearly R29 billion in the year, we extended network coverage to more people. We also connected more of the unconnected through MTN Data-Smart’s digital literacy initiative. Available in eight African markets, this has now been used to train more than 18 million people about the power of the internet.
On 1 April, three women entered key leadership roles at MTN Board and Executive Committee level, helping the Group reach a milestone of 33% women at Board level and 28% at Exco level, both above African and global averages.
Through our CSI efforts, in 2020 MTN impacted 23,8 million people, of whom 10,5 million were youth, providing them with the ICT skills and opportunities to help them become economically active.
Our Transparency Report seeks to provide an understanding of our operating environment, risks and approach to digital human rights across our footprint.
In many of the countries in which the Group operates, MTN is one of the largest taxpayers. This comes with the responsibility to report thoroughly and transparently on our tax affairs. MTN Group’s 2020 Tax Report spells out our total tax contribution, which goes well beyond the corporate income taxes paid on profits to include indirect taxes, withholding taxes, payroll taxes, operating licence fees and other payments to authorities.
In 2020, MTN Group’s total tax contribution was R35,1 billion, up from R30,5 billion in 2019. This was just one of the ways the Group contributed to enhancing sustainable societies.
“We believe that this suite of reports will provide stakeholders with a comprehensive and integrated understanding of the progress and achievements of the MTN Group, as well as the priorities over the short, medium and longer term,” concludes Mupita. To access reports: https://www.mtn.com/investors/financial-reporting/integrated-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.
- 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 Group has released its integrated and sustainability reports for the period ending 31 December 2018, setting out how the group creates value and highlights the six distinct growth opportunities the company is pursuing across the voice, data, digital, fintech, enterprise and wholesale markets.
The integrated report is MTN’s primary communication to stakeholders and aims to enable them to make an informed assessment of MTN’s performance and prospects. It is the company’s value-creation story. The sustainability report aims to provide a balanced, accurate and accessible overview of MTN’s strategy and performance relating to socio-economic, labour and environmental issues, and ethics and human rights.
As part of efforts to enhance digital inclusion, in 2018, the company started executing its dual-data strategy aimed at enhancing digital inclusion. Other key highlights include the expansion of active data users by 10 million to 79 million. The company highlights the growth in MTN Mobile Money users to 27 million, with services revenues of approximately R8bn as part of its efforts to drive financial inclusion.
In 2019, the company will continue implementing its CHASE framework to accelerate internet adoption by addressing issues related to quality coverage, handset availability, affordability, services and education to bring new opportunities to people previously excluded from the digital world.
MTN will also extend initiatives to make smartphones more accessible and affordable, mainly through the launch of its low-cost 3G smart-feature phone, priced at approximately US$25. MTN also plans to launch Mobile Money in South Africa, Nigeria, Afghanistan and Sudan and launch an advanced instant messaging and communications platform.
“As MTN, we are focused on solutions to enhance digital and financial inclusion and transform societies. We firmly believe that technology and connectivity can provide transformative solutions to some of the world’s complex challenges,” said Rob Shuter, MTN’s group president and CEO.
He added that, “In 2018 we unpacked what is really needed to connect people digitally and partnered with stakeholders who share our belief, that everyone deserves the benefits of a modern connected life.”
The company also released its 2018 tax report, which shows that MTN’s contribution to tax revenues goes significantly beyond the corporate income taxes paid on its profits. In 2018, MTN’s total tax contribution was R24,1 billion, including but not limited to corporate taxes, indirect taxes, withholding taxes, payroll taxes, operating licence fees and other payments to government authorities.
Commenting on the tax report, MTN Group CFO, Ralph Mupita said, “The 2018 tax report yet again illustrates the significant contribution that the MTN Group makes to fiscal revenues in the various markets in which we operate, and call home.”
He added that, “We have a low tax risk appetite across all our markets and look to ensure that taxes due are paid. We further focus on ensuring that the highest level possible for tax compliance is adhered to across all markets.”