Pan African mobile operator MTN Group today reported runaway success in full year 2022 results, expanding return on equity and an increase in dividends.

MTN Group, which has a footprint in 19 markets, side-stepped a challenging macroeconomic environment of elevated inflation across its markets, to report a strong 2022 financial performance.

In the year to December 2022, the operator reported an expansion in return on equity to 23.4% and a 10% increase in the dividend to 330 cents per share.

Total subscribers rose 6% to 289 million, with data subscribers growing by more than 12% to 137 million and Mobile Money users up by 21% to 69 million.

In constant currency terms, MTN Group reported a 15.3% increase in service revenue to R194 billion and maintained a stable margin on earnings before interest, tax, depreciation and amortisation (EBITDA) of 44%.

EBITDA increased by 14.3% to R90 billion, with MTN saying it was supported by its expense efficiency programme, which yielded R2.7 billion in savings, mostly in Nigeria and South Africa.

“MTN delivered a solid operating and financial performance in 2022, as we continued to execute on our Ambition 2025 strategy. We are pleased with the business’ continued resilience under challenging global and regional macroeconomic conditions,” says Ralph Mupita, MTN Group president and CEO.

“Macroeconomic conditions across the markets were mostly impacted by rising and elevated inflation as well as broad-based weakening of local currencies against the US dollar. The average blended inflation rate in our markets was 15.1% in 2022 compared to 11.5% in 2021. Coupled with higher interest rates, consumers felt pressure on disposable incomes while enterprises optimised expenditure and capital investment during the period.”

On home ground in South Africa, MTN Group says operating conditions were significantly impacted by the declining electricity availability, which worsened in the second half of the year.

Globally, ongoing geopolitical volatility, supply chain constraints driven by China’s zero COVID-19 policy, and exchange rate volatility also added pressure to the operator’s operating margins.

“Against this backdrop, we are pleased that the structurally higher demand for data and fintech was sustained, with data traffic and fintech transactions volume through our ecosystem increasing by 32.6% and 33.9% respectively. To support this growth, we invested R38.2 billion in our networks and platforms in 2022 – with a capex intensity of 18.5% – as we also accelerated capex in key markets in order to mitigate supply chain and foreign currency risks,” says Mupita.

“Alongside this continued investment, we put in place proactive commercial, expense efficiency, supply chain, network and financial resilience interventions to mitigate the increased volatility in our operating environment. This enabled us to achieve mid-teen service revenue growth in line with guidance, stable EBITDA margin, return on equity expansion and reduced Holdco leverage that remains well within guidelines.”

Golden goose

Turning to Nigerian operations, MTN Group’s biggest revenue contributor, Mupita says the unit delivered `pleasing overall performance’, given macroeconomic and operational challenges.

Nigeria is the top profit-making market for MTN Group, generating the lion’s share of the telco’s revenue.

In the current reporting period, it reported service revenue growth of 21.5% year-on-year, in line with medium-term guidance of at least 20%, according to Mupita.

“This,” he says, “was largely driven by data, fintech and digital revenue, while voice revenue maintained a steady recovery as more customers’ SIMs were re-activated and gross connections ramped up following the implementation of the National Communications Commission directive on NIN-SIM registration. Overall, voice revenue grew by 6.9% year-on-year.”

In the year, MTN Nigeria data revenue rose by 48.0%, maintaining the accelerated growth trajectory through increases in active data users (up 15.3%) and traffic (up 66.6%).

The telco, which is seeking to cement its position in financial services across Africa, recorded increased uptake of its fintech services in Nigeria.

Fintech revenue rose by 19.4%, with solid growth in Xtratime, the airtime lending product, and Core of MTN fintech services.

Fintech active users rose by 57.5% to 14.9 million, with approximately two million active Mobile Money (MoMo) wallets.

“Following the launch of MoMo PSB in May 2022, the number of registered MoMo wallets reached 13.2 million, indicating the underlying momentum in the ecosystem. This helped to drive growth in the total volume of transactions to over 287.8 million,” says Mupita.