MTN Group delivered a solid operational and financial performance in the first nine months of this year, despite difficult macroeconomic, geopolitical and regulatory conditions, though cautioned that the outlook for the rest of the year remained challenging
In its quarterly update for the period ended September 30, 2022, released on Friday, the mobile operator said group service revenue increased by 14.3%, led by data revenue, which rose by 33.2%, while fintech surged by 12.9%.
Earnings before interest, tax, depreciation and amortisation grew by 24.7%.
Total MTN Group subscribers grew by 6.8%, to 285 million.
Group president and chief executive Ralph Mupita said: "The rise in energy, food prices and general inflation, as well as interest rates, continued to put pressure on consumers and our business. Weakening local currencies as well as the limited availability of dollars in many markets added further pressure to operating margins, as well as to our efforts to secure planned capital expenditure."
Mupita said MTN made good progress in the implementation of its network resilience plan in South Africa to mitigate the impact of persistent power cuts, which affected network availability and operations.
"Amid unprecedented load shedding, which negatively affected network availability, MTN South Africa expanded market share, delivered encouraging underlying service revenue growth, strong expense controls and investment in network resilience and expanding the 5G coverage,” Mupita said.
MTN South Africa's service revenue increased by 3.5%, with an Ebitda margin of 39.5%, from 41.6%. The service revenue was impacted by load shedding and concessions to support the Cell C recapitalisation. In September, Cell C finished its recapitalisation and said its financial position had improved.
"Wholesale revenue increased by 0.7%, thanks to the national roaming deals with Cell C and Telkom. The national roaming agreement with Telkom, aligned with the group’s work to monetise investments in networks, took effect on November 1, 2021," the group said.
However, rising cost of living and the impact of load shedding was felt most acutely in the consumer prepaid market, where service revenue grew by 0.4% in the period.
In the nine months to September 2022, MTN SA grew its subscriber base by more than 800 000 to 35.9 million, an increase of 8.1% year on year.
"This was driven by higher gross additions and improved customer value proposition fostering customer retention. Demand for integrated voice and data-centric plans led to postpaid subscriber numbers expanding by 10.4% to 8.0 million. Prepaid subscribers increased by 7.5% to 27.9 million," it said.
Data continued to lead the business, contributing 45.4% to MTN SA’s total service revenue. Mobile data revenue grew by 13.3% year on year, with a growth of 11.2% year for the third quarter, on the back of a 36.4% increase in data traffic and an 11.7% increase in active data users to 18.8 million.
On Friday, MTN also announced it was selling its Afghanistan business to Beirut-based M1 New Ventures for $35 million (R64m) as MTN continues to exit the Middle East to focus on African markets.
Meanwhile, MTN Nigeria delivered a strong overall performance in a challenging operating environment.
Looking ahead, Mupita said the outlook for the rest of the year remained challenging, given the difficult geopolitical conditions and the macroeconomic environment globally.
"We anticipate inflationary pressures and foreign currency volatility to remain challenging for our customers, supply chains and our business in the final quarter of 2022," Mupita said.
MTN shares closed 2.24% higher at R134.94 on the JSE. They have increased by 9.43% in the past six months.
BUSINESS REPORT