MTN Group, the mobile operator with 290 million subscribers in 19 markets, lifted earnings before interest tax depreciation and amortisation (Ebitda) by 11.2% in the nine months to September 30.
The pan-African group said in a quarterly update that the Ebitda margin, however, was 43.2% year-to-date (YTD), slightly lower than 44.2% at the same time last year, impacted by upward costs due to inflation and forex depreciation, network resilience costs in MTN SA, and the impact from the conflict in Sudan.
These factors were partially mitigated by an expense programme that saw “sustainable cost savings of R1.5 billion and saw the group reach its target for 2023.
MTN’s share price traded 2.29% lower to R95.06 yesterday afternoon, in line with the decline by 2.1% of the JSE All Share Index at the time, but a price that was also 28.8% lower over 12 months.
"MTN maintained a resilient performance…as inflation remained elevated across our markets...Encouragingly, in Q3, inflation has started to show some signs of subsiding across our footprint, led by markets such as South Africa, Ghana and Uganda,” Group President Ralph Mupita said in a statement.
The Nigerian naira’s devaluation had a material impact on results, particularly in the third quarter. Foreign exchange markets were volatile, with local currencies under pressure against the US dollar and the availability of forex was constrained, particularly in Nigeria, he said.
Power outages in South Africa were a challenge, but progress was made on the network resilience programme.
Total subscribers rose by 1.8% to 290.1 million. Active data subscribers increased 6.7% to 144.6m. Active Mobile Money (MoMo) monthly users (MAU) was up by 0.7% to 63.5m.
Fintech transaction volumes increased 33.9% to 12.7 billion.
“We remained focused on the execution of our Ambition 2025 strategy to navigate the macro challenges… we invested capex of R26.2bn YTD... and sustained the growth in our business,” said Mupita
Service revenue increased 14.2% driven by steady growth of 2.6% from MTN South Africa (MTN SA) as well as strong growth in MTN Nigeria (up 21.4%) and MTN Ghana (up 36.6%).
The slowdown in third service revenue growth (up 12.3%) was impacted by the conflict in Sudan. Excluding this, group service revenue growth in the third quarter would have been up 13.9%.
The 1.8% increase in subscriber numbers to 290.1m was affected by subscriber registration regulations in Ghana and Nigeria, as well as a decline in subscribers in Sudan. Active data subscribers were up by 6.7% to 144.6m, supporting increased traffic and data revenue growth.
MoMo active users increased by 0.7% to 63.5 million impacted by a shift from agent banking to wallet in Nigeria, as well as the implementation of a change in definition of activity across the group that impacted Côte d'Ivoire and South Africa adversely. Transaction volume and value rose 33.9% and 57.1% respectively.
“Overall, we are pleased with the continued acceleration in fintech,” Pupita said.
A healthy liquidity position was maintained with R45.6bn headroom as at September 30, 2023.
MTN SA was “on a steady path” of improving top-line growth and profitability. MTN Nigeria streamlined its data bundle mix and launched new offerings that were expected help to optimise pricing.
The group was on track to deploy capex broadly in line with guidance, of R40.1bn.
The board anticipated paying a minimum dividend of 330 cents per share for the 2023 financial year.
Mupita said they were committed to realising further saving gains over the medium term, with a target of R7bn to 8bn in expense efficiencies targeted over three years from the 2024 financial year.
BUSINESS REPORT