Performance by MTN’s operations in Ghana, Nigeria, South Africa and Uganda - specifically in terms of revenue from Fintech and data - has helped the operator maintain its course through turbulent macroeconomic and geopolitical conditions.

According to its 2022 interim results, service revenue grew by 14.8% to R92.5 billion; earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 15.1% to R43.9 billion before once-off items; and the EBITDA margin expanded by 0.3 percentage points to 45.3%.

President and CEO Ralph Mupita said, ““Growth in data revenue was particularly strong, up 35.9%, driven by MTN Nigeria, MTN Ghana, MTN Cameroon and MTN South Africa,” adding that Fintech revenue grew by 14.0%, with solid performances from Nigeria, Uganda and Ghana.

“The introduction of Fintech taxes in some markets slowed revenue growth in Q2, but we remain encouraged by the ecosystem growth as users, agents and merchants continued to grow healthily during the period under review, with transaction volumes growing by 31.5% during the period.”

Mupita also stressed the company’s accelerated investment in its network and broadband coverage.

He said, “We accelerated network investment to R17.1 billion and spent an additional R7 billion on securing 4G and 5G spectrum in the key markets of South Africa and Nigeria.”

MTN said this investment has increased access to broadband services to 85.5% of the population and a 22.5% reduction in data tariffs.

Building platforms

MTN said its Ambition 2025 strategy involves the construction of “five scale platform businesses on top of a very strong connectivity network.”

The company described the Fintech platform as the most mature of these.

In the period under review, MTN has 60.7 million Mobile Money users on its books, which the company says is up 24% year-on-year, and has generated six billion transactions worth US$116.3 billion. The total number of MTN subscribers in the period was 281.6 million, up 5.6%.

“We made progress in our work to separate our Fintech and fibre businesses from our GSM business and have started the process of engagement with select potential strategic investors into the Group Fintech structure, the outcome of which should be concluded by the end of the year,” the company added.

Chief Financial Officer Tsholo Molefe said the Group accelerated the deleveraging of the balance sheet in the six months to end-June 2022, boosted by the repatriation of R9.4-billion in cash from operating companies, including R4.5-billion from Nigeria: “We continue to explore opportunities for further liability management and remain focused on reducing the hard currency liabilities on our balance sheet.”

Underlying operating free cashflow growth was strong at 24.0%, and return on equity increased to 24.2%, reflecting the consistent delivery of earnings.

“We accelerated our portfolio transformation, delivering R9.2 billion in asset realisations in the first half and bringing the total realised since March 2020 to R15.8 billion, with proceeds supporting the group leverage and liquidity positions, which strengthened during the period. In line with our pan-Africa focus, we accepted a binding offer for 100% of MTN Afghanistan,” Molefe added.

Mupita said the headwinds facing customers and the business looked likely to persist in the second half, specifically in terms of power generation and supply.

“The business is well positioned to navigate the prevailing market conditions. In South Africa, we are focused on improving the resilience and availability of the network, given the constrained on-grid power situation. Battery and generators solutions will be deployed to restore network availability to the world-class standards our customers have been used to. This resilience plan will be executed within the capital expenditure envelope of the business.

“If we experience the same level of loadshedding in H2 as we did in H1 in South Africa, service revenue will come in slightly under guidance, with margins at the lower end of the range communicated to investors.”