Despite challenging trading conditions and fierce competition, the telecommunications Giant, MTN has recorded enviable achievements for the year ended 31st December, 2019.
For its commercial momentum recorded in its financial performance, the telco gave credit to the result yielding efforts of MTN Nigeria and MTN Ghana.
“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”, the telecommunications company highlighted.
Disclosing this in a statement, MTN stated that, 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.”
Having the most expansive telecoms network in the country, with the largest subscriber number of 70.67 million, MTN said it would continue to invest in fixed assets and facilities in the country, and has earmarked additional N600 billion on network expansion in the next three years.
Furthermore, the telco says MTN Nigeria has invested as much as N4.55 trillion ($14.67 billion) in fixed assets and facilities across Nigeria for since the first commercial rollout of its telecoms services in Nigeria in 2001.
According to the telco, bulk of the money spent on fixed assets and facilities, was on Base Transceiver Stations (BTS) otherwise known as Base Stations, as well as fibre optic cables and microwave facilities, designed for the transmission of voice and data services across the country.
MTN said its network expansion helped it in reducing the country’s unemployment figure by employing over 500,000 Nigerians directly and indirectly, since the inception of its commercial rollout of telecoms services in Nigeria in 2001.
“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.”
It has also spent over N20 billion on projects carried out and funded by MTN Foundation in 860 locations across the 36 states of Nigeria, including the Federal Capital Territory, where it sets aside one per cent of profit after tax annually to fund the activities of the MTN Foundation.
“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”, the statement reads.
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.”