In their interim results, MTN Group reported a resilient performance in the first half of 2022, balancing an accelerated investment into its networks, reducing the cost to communication, and the delivery of solid financial results.
Here are some highlights from the report:
We advanced the delivery of our strategy under challenging conditions, which included macroeconomic and geopolitical volatility, global supply chain disruptions, constrained on-grid power supply in South Africa and greater regulatory requirements across many markets. The investment in networks increased access to broadband services to 85.5% of the population and led to an average 22.5% reduction in data tariffs. Our contribution to society and economies also included cash taxes of R7.3 billion paid to nation states in the period.
Notwithstanding the tough macro conditions, MTN remained focused on investing in our markets to increase broadband coverage and to reduce the cost to communicate. 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 NigeriaRalph Mupita, President and CEO, MTN
In driving investment that grows gross capital formation, the contribution we made to jobs and the fiscal resources of nation states was underlined by good financial results in the first six months of 2022.
In constant-currency terms, service revenue grew by 14.8% to R92.5 billion; earnings before interest, tax, depreciation and amortization (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%. This was supported by the focused execution of our expense efficiency programme.
Growth in data revenue was particularly strong, up 35.9%, driven by MTN Nigeria, MTN Ghana, MTN Cameroon and MTN South Africa.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.Ralph Mupita, President and CEO, MTN
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.
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.Ralph Mupita, President and CEO, MTN