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Market Digest Nigeria

Business

MTN reports strong H1 results despite COVID-19, announces Middle East exit and Africa focus

MTN Group has announced its interim financial results for the six months delivering a robust set of metrics despite ‘difficult trading conditions, exacerbated by  COVID-19 pandemic’.

The pan-African carrier reported year-on-year service revenue growth of 9.4% to ZAR80.2 billion (USD4.6 billion) from ZAR67.9 billion in H1 2019 and EBITDA growth of 10.9% to ZAR41.8 billion driven by ‘efficiency initiatives’ that helped bolster profit margins, increase operating free cash flow and boost its return on earnings by 14.1%, it said.

The uptick in service revenue was fuelled by growth of 12.4% at MTN Nigeria and 19.4% at MTN Ghana, although MTN South Africa reported a 2.5% decline in service revenue, as a result of ‘the lost national roaming revenues arising from the discontinuation of our roaming agreement with Telkom and effects of the continued accounting for Cell C revenue on a cash basis’.

Net profit, meanwhile, soared to ZAR12.1 billion from ZAR4.6 billion in a period in which the group added a net 21.246 million net new subscriber additions to reach a total base of 261.458 million at end-June 2020, up from 240.212 million y-o-y. It also reached a ‘significant milestone’ in surpassing the 100 million mark in terms of active data users, closing out June with a total of 101.885 million (1H19: 82.264 million).

MTN also announced it is focusing its strategy in future on the African markets: ‘As part of our ongoing portfolio review, we believe the group is best served to focus in the future on our pan-African strategy. We will therefore be exiting the Middle East in an orderly manner over the medium term. As a first step we are in advanced discussions to sell our 75% stake in MTN Syria,’ said Shuter, adding:

‘While we expect the remainder of the year to be shaped by the ongoing challenges presented by the pandemic, we believe that MTN will remain comparatively resilient and is poised to sustain its growth over the medium term.’

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