MTN to exit Middle East, intensify focus on Africa
The MTN Group expects to sustain its growth in the medium term, despite the continued impact of COVID-19 on global markets, as it readies an exit strategy for the Middle East and affirms focus on Africa.
The company outlined details as part of the presentation of its financial results for the first half of 2020.
MTN Group president and chief executive officer Rob Shuter said: “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.”
MTN reported service revenue growth of 9,4% to R80 billion and EBITDA growth of 10,9% to R42 billion. Headline earnings per share after non-operational impacts grew by 54%, operating free cash flow increased by 117,8% and ROE improved further to 14,1%.
Shuter added: “MTN’s first half performance affirmed the resilience of our people and business model as we delivered strong results against the backdrop of unprecedented socio- and macroeconomic uncertainty and challenges. As we navigate the pandemic and its effects, we have prioritised looking after our people, customers and networks while focusing on efficiencies."
He said that work-from-home programmes continue for MTN staff; Y’ello Hope Packages are helping ease customers’ financial pressures; and MTN’s support for various other initiatives aims to limit the impact of COVID-19 on society.”
MTN added 11 million subscribers in the first six months of the year to reach a total base of 262 million. By end June 2020, the operator had 102 million active data users and 38 million active Mobile Money users.
“Despite lockdown restrictions impacting network rollout, MTN Group invested R10-billion in capital expenditure across our markets and brought a further 54 million people into 3G and 4G coverage. The focus on affordability of data saw the average rate per megabyte reduced by 34%,” the company stated.
The group made progress on the asset realisation programme, concluding the disposal of the tower company investments in Ghana and Uganda for R8,8 billion.
According to official results for the six months ended 30 June 2020, MTN Ghana continues to prioritise its investments in infrastructure expansion and have invested GH¢715.6 million in capex^ to date (2019 capex: GH¢803.1 million) "supporting significant improvement in network coverage, customer experience and quality of service (QoS)."
The company stated: “Following a strong overall performance in the first half of the year, we are cautious of the uncertainties surrounding the likely duration and related economic impact of the COVID-19 pandemic for the rest of the year. The potential areas of impact and focus remain our employee and customers’ safety; regulatory risk; supply chain delays and availability; liquidity, currency and counterparty risks management; and the potential revenue impact from reduced consumer spend.”
“We remain focused on our journey from a traditional mobile telecommunications operator to an emerging digital operator, with 2020 being the ‘Year of the customer: the digital experience’ with focus on digitalisation as a tool to enhance customer experience as well as create value for our shareholders.”
MTN did not declare an interim dividend given the continued uncertain impact of COVID-19 on the operating environment but will consider a final dividend should conditions warrant.
“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,” said Shuter.
At the end of July 2020 and prior to the release of its interim results, MTN issued a trading statement confirming the appointment of Shuter as CEO of BT Enterprise, effective March 2021.
MTN noted the announcement issued by BT Group Plc that Rob has been appointed as the CEO of BT Enterprise.
“Rob will relocate to the UK and start with BT Group Plc in 2021 after finishing at MTN. MTN thanks Rob for his contribution over the years and wishes him well in his new endeavours.”
According to MTN, the succession process is on track and an announcement is expected in the next 4 to 8 weeks.