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MTN’s African operations weather economic storm to strengthen Q3 results

By , ITWeb
Africa , South Africa , 04 Nov 2022

Total MTN Group subscribers increased by 6.8% to 285 million; Fintech business’ customer base rose by 23.3% to 63 million.

MTN Group president and CEO Ralph Mupita.
MTN Group president and CEO Ralph Mupita.

The MTN Group has underlined the resilience of its South African subsidiary, along with that of its Nigeria, Ghana, Rwanda and Uganda operations, as a significant contributing factor to the company’s Q3 results.

Over the past week, these subsidiaries have posted results for the first nine months of 2022. MTN has described the results as ‘resilient under difficult macroeconomic geopolitical and regulatory conditions’.

These operations contributed to the overall increase of 14.3%, in constant currency, to R144-billion in MTN Group service revenue; strong growth in data traffic and Fintech transaction volumes; and the expansion of the Group EBITDA profit margin to 45.3% in an environment of elevated energy and general inflation.

MTN South Africa, the Group’s second-largest contributor to service revenue after MTN Nigeria, grew subscriber numbers by 8.1% to 35.9 million in the period to 30 September 2022.

Service revenue growth of 3.5% was impacted by loadshedding and revenue concessions that supported the recapitalisation of national roaming customer Cell C, the operator stated.

A statement released by MTN reads: “MTN South Africa’s enterprise business continued to expand, delivering service revenue growth of 19.7%. The consumer postpaid business was resilient, with growth of 4.2%. The rising cost of living and the impact of loadshedding was felt most acutely in the consumer prepaid market, where service revenue grew by 0.4% in the period.”

MTN Group President and CEO Ralph Mupita, said, “Amid unprecedented loadshedding which negatively affected network availability, MTN South Africa expanded market share, delivered encouraging underlying service revenue growth, strong expense controls and investment in network resilience and expanding the 5G coverage.”

“Work on network resilience and availability progressed well, but persistent loadshedding in the last quarter of the year could impact revenue growth, particularly in the consumer prepaid market.”

The Group maintained a strong balance sheet with the early partial settlement of US$300-million of 2024 Eurobonds, resulting in lower hard currency debt and reducing the holding company leverage to 0.8x.

“The Group’s liquidity position remained strong with cash and committed undrawn facilities totalling R59-billion. Cash upstreaming of R11.5-billion from operations in the first nine months of the year was further improved with R1.5-billion in cash repatriated from Nigeria in October 2022, after the period close,” the statement continued.

MTN Group also reported progress with its process of strategic minority investment into the Group Fintech business, noting that it was now in the binding offer phase and expecting outcomes in early Q1 2023.

Mupita added: “In the near term, revenue growth has been impacted by new taxes in a few markets, but we continue to see the case for structural and compelling growth for Fintech services in the medium term that will deepen financial inclusion across Africa.”

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