Wrap Text
Quarterly update for the period ended 30 September 2024
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN: ZAE000042164)
(MTN or the Company or the Group)
Quarterly update for the period ended 30 September 2024
MTN is a pan-African mobile operator with the strategic intent of 'Leading digital solutions for Africa's
progress'. We have 288 million customers in 17 markets and are inspired by our belief that everyone
deserves the benefits of a modern connected life.
Third quarter (Q3) 2024 key messages
• Solid overall commercial momentum in the core connectivity business
• Strong fintech result, underpinned by robust advanced services growth
• Good progress in execution of strategic priorities
• Balance sheet resilience | Cash upstreaming and localisation proceeds
• Challenging macroeconomic trends eased in Q3 2024
• Medium-term guidance maintained
Highlights
• Group service revenue decreased by 18.5% (up 12.9%* in constant currency)
o Voice revenue decreased by 31.3% (up 1.0%* in constant currency)
o Data revenue decreased by 15.3% (up 21.3%* in constant currency)
o Fintech revenue growth of 8.5% (up 28.9%* in constant currency)
• Total subscribers increased by 1.6% to 288 million
• Active data subscribers up by 7.4% to 152.8 million
• Mobile Money (MoMo) monthly active users (MAU) increased by 5.7% to 61.5 million^
• Data traffic increased by 34.1% to 14 141 PB
• Fintech transaction volumes increased by 17.4% to 14.9 billion | Transaction value increased by
27.1%* to US$229.2 billion
* Constant currency information after accounting for the impact of the pro forma adjustments as defined and included throughout this Stock Exchange News Service of the JSE Limited (JSE)
(SENS) announcement.
^ MAU excluding over-the-counter (OTC) customers in Nigeria
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YTD 3Q 24
YTD % change 3Q 24 % change Contribution
YTD^ YTD^ % change constant % change constant to
Rm 3Q 24 3Q 23 reported currency reported currency Group
Group service revenue 127 370 156 295 (18.5%) 12.9% (13.4%) 14.7%
- South Africa 32 017 30 993 3.3% 3.3% 3.3% 3.3% 25.0%
- Nigeria 29 912 58 255 (48.7% 33.3% (36.0%) 35.4% 23.0%
- Ghana 15 818 14 968 5.7% 31.9% (1.5%) 33.4% 12.2%
- Uganda 11 242 9 493 18.4% 20.1% 14.6% 19.5% 8.6%
Group EBITDA~
(before once-off items) 45 691 70 308 (35.0%) 3.4% (20.8%) 11.6%
- South Africa# 14 278 13 866 3.0% 3.0% 0.4% 0.4% 32.9%
- Nigeria 10 914 30 314 (64.0%) (5.9%) (49.9%) 6.0% 24.0%
- Ghana 8 855 8 422 5.1% 32.2% (1.8%) 33.9% 21.0%
- Uganda 5 871 4 866 20.7% 22.4% 17.1% 22.2% 13.3%
Group EBITDA margin 33.8% 42.8% (9.0pp) (3.2pp) (3.6pp) (0.8pp)
- South Africa# 36.3% 36.4% (0.1pp) (0.1pp) (1.1pp) (1.1pp)
- Nigeria 36.2% 51.7% (15.5pp) (15.2pp) (10.4pp) (10.4pp)
- Ghana 55.8% 56.0% (0.2pp) 0.2pp (0.1pp) 0.3pp
- Uganda 51.7% 50.5% 1.2pp 1.2pp 1.5pp 1.5pp
Capital expenditure
(capex, IFRS 16) 44 670 43 921
- Capex (ex-leases) 19 841 26 166
- Capex intensity (ex-leases) 14.7% 15.9%
~ Earnings before interest, tax, depreciation and amortisation
^ Year-to-date
# Excludes tower sale gain
Unless otherwise stated, financial and non-financial growth rates are presented on a constant currency basis and are year-on-year (YoY,
9M to September 2024 versus 9M to September 2023).
Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access data and excludes roaming and wholesale.
Fintech includes MoMo, insurance, airtime lending and e-commerce. Active data users are a count of all subscribers at a point in time who
had a revenue-generating event in the specified period (90 days) prior to that point in time and during the past 30 days had data usage
greater than or equal to 5 megabytes. MoMo users are 30-day active users.
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Group President and CEO Ralph Mupita comments:
Navigating challenging macro and regulatory conditions, though trends eased in Q3
"In the first nine months of 2024, MTN Group navigated a challenging macro environment and
regulatory developments to deliver a resilient operating performance. There was an encouraging
deceleration in blended inflation and reduced currency volatility across our markets in Q3 2024 relative
to the first two quarters of the year.
Blended inflation across our footprint eased to an average 13.9%, compared to 17.1% in the same
period of 2023. The naira continued to depreciate, closing the period at N1 541/US$ (December 2023:
N907) and having a material impact on our reported results. However, the naira was less volatile on a
sequential basis in Q3 than in preceding quarters. The rand strengthened, ending September 2024 at
R17.22 (December 2023: R18.27). While the cedi weakened by 19.5% against the US dollar, the
Ugandan shilling strengthened YTD by 2.4%.
Solid operational execution and performance
With a continued focus on our strategic priorities, we invested capex of R19.8 billion in our networks
and platforms, reflecting capex intensity of 14.7% – compared with our medium-term target range of
15-18%. This helped to support the robust data traffic growth of 34.1% (37.0% excluding JVs) and
fintech transaction volumes (up 17.4%) that underpin our growth thesis.
The Group delivered service revenue growth of 12.9%*, with MTN South Africa (MTN SA) reporting a
3.3% rise; MTN Nigeria, MTN Ghana and MTN Uganda's service revenue increased by 33.3%*, 31.9%*
and 20.1%* respectively. Excluding our operation in conflict-hit Sudan, Group service revenue growth
was 14.0%*, which is in line with our mid-teen growth target.
Our subscriber base grew by 1.6% to 288 million by the end of September 2024, affected by subscriber
registration regulations in Nigeria and a decline in users in Sudan, where millions of people have been
displaced by the conflict in that country. The underlying expansion of the subscriber base was 4.3%
when adjusted for Nigeria and Sudan. Overall, the Group's active data users increased by 7.4% to 152.8
million (up 7.9% excluding JVs), supporting data revenue growth of 21.3%.
Demand for fintech services remained strong, with the number of active MoMo users up by 5.7% to
61.5 million (excluding OTC customers). Fintech revenue increased by 28.9%*, with continued pleasing
development of advanced services revenue, which grew by 53.1%*. The EBITDA margin within the
fintech business improved on a YoY basis, to the top end of our targeted range of mid to high-30%.
Overall Group EBITDA increased by 3.4%*, with a number of macro factors putting upward pressure
on our costs – these included elevated inflation, foreign exchange (forex) movements and the conflict
in Sudan. These pressures were mitigated by savings derived from the successfully renegotiated tower
lease contracts in Nigeria in August 2024.
The revised terms with IHS in Nigeria reduced the US dollar-indexed component of the leases linked to
a discounted US consumer price index (CPI) and removed technology-based pricing, ensuring that
payments for new upgrades will be based on tower space and power usage. The renegotiated
agreements incorporate an energy cost component indexed to the cost of providing diesel power;
however, the terms also include discounts and incentives over the life of the contracts.
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In the current period, the accrued operating expense (opex) savings from the effective date of the
contract on 1 April 2024 was approximately R603million as at the end of September, and free cash
flow savings amounted to approximately R502 million. Also supported by the ongoing progress made
with our Group-wide expense efficiency programme, the overall EBITDA margin narrowed by 3.2pp*
to 37.3%*.
Progress on key strategic initiatives
We continued to advance our strategic priorities, including our localisation initiatives. In Q3, we
achieved an additional 2.1% localisation in Ghana, bringing the local shareholding in Scancom PLC to
30%. This followed the successful sell-down in June 2024 of a further 7% in MTN Uganda. We have now
exited Guinea Bissau, as part of our portfolio optimisation, and work is underway to complete the exit
from Guinea Conakry.
We are also pleased to have concluded the extension of the 2016 MTN broad-based black economic
empowerment (B-BBEE) scheme operated through MTN Zakhele Futhi Limited (MTNZF). The proposal
to extend the scheme was approved by both MTN Group and MTNZF shareholders at general meetings
held post the period end in October 2024. All related conditions precedent have been fulfilled. The
extension aligns with our commitment to transformation and the creation of shared value for South
Africans. It is integral to the ethos of MTN and we believe that B-BBEE participation is important to the
future success of the Group.
Balance sheet and liquidity positions
The Group net-debt-to-EBITDA ratio of 0.8x at end-September 2024 remained well within our loan
covenant limit of 2.5x. Holding company leverage of 1.8x, was supported by cash upstreamed and
localisation proceeds. We maintained a healthy liquidity position, with headroom of R32.1 billion.
In Q3, MTN Group upstreamed cash of R2.2 billion from our operating companies, bringing the total
cash upstreamed YTD to R8.7 billion. In addition, we realised approximately R600 million in gross
localisation proceeds from MTN Ghana in Q3, bringing the total YTD proceeds from localisations to
approximately R2.3 billion.
Outlook
Although the macro environment is forecast to remain challenging in the near term, we are
encouraged by the abating trends in inflation in our footprint, as well as reduced volatility in forex
movements. As these factors continue to normalise, we anticipate positive impacts on consumer
spending power and our business operations.
We expect total capex deployment for FY 2024 to fall within our guidance of R28-33 billion (ex-leases)
and to maintain capex intensity within our medium-term target range. This incorporates an expected
uptick in MTN Nigeria's capex in Q4, to support the increased traffic growth on the network being
driven by stronger demand. Our work to achieve expense efficiencies of R7-8 billion between 2024 and
2026 continues, to mitigate the impacts of macro volatility on our business.
We will maintain our disciplined approach to capital allocation, focused operational execution, and
strategic delivery in the final quarter of 2024. Our overall medium-term guidance framework and
anticipated ordinary dividend of 330cps for FY 2024 remain unchanged."
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Any forward-looking financial information disclosed in this results announcement, including the dividend guidance, has not been reviewed or
audited or otherwise reported on by our external auditor.
Certain information presented in this quarterly update constitutes pro forma financial information and constant currency information. This
pro forma financial information and constant currency information has not been audited or reviewed or otherwise reported on by MTN's
external auditor. The responsibility for preparing and presenting the pro forma financial information and constant currency information for
the completeness and accuracy of the pro forma financial information and constant currency information is that of the directors of MTN. This
is presented for illustrative purposes only. Because of its nature, the pro forma financial information and constant currency financial
information may not fairly present MTN's financial position, changes in equity, and results of operations or cash flows.
Constant currency information has been presented to remove the impact of movement in currency rates on the Group's results and has been
calculated by translating the prior financial reporting period's results at the current period's average rates. The measurement has been
performed for each of the Group's currencies, materially being that of the US dollar and Nigerian naira. The constant currency growth
percentage has been calculated based on the prior period constant currency results compared to the current year results. In addition, in
respect of MTN Irancell, MTN Sudan, MTN South Sudan and MTN Ghana the constant currency information has been prepared excluding the
impact of hyperinflation. The economies of Sudan, South Sudan, Iran and Ghana were assessed to be hyperinflationary for the period under
review and hyperinflation accounting was applied.
The Group's results and segmental report are presented in line with the Group's operational structure. The Group's underlying operations
are clustered as follows: South Africa (SA), Nigeria, the Southern and East Africa (SEA) region, the West and Central Africa (WECA) region and
the Middle East and North Africa (MENA) region and their respective underlying operations.
The SEA region includes Uganda, Zambia, Rwanda, South Sudan, Botswana (joint venture-equity accounted), eSwatini (joint venture-equity
accounted) and Business Group. The WECA region includes Ghana, Cameroon, Côte d'Ivoire, Benin, Congo-Brazzaville, Liberia, and Guinea
Conakry. The MENA region includes Iran (joint venture-equity accounted) and Sudan.
Although Iran, Botswana and eSwatini form part of their respective regions geographically and operationally, they are excluded from their
respective regional results because they are equity accounted for by the Group.
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Operational review
Listed Opcos' published Q3 2024 results
The published Q3 results of our listed Opcos can be viewed at:
• MTN Nigeria:
https://www.mtn.ng/investors/financial-reporting/?report_cat=quarterly-results
• MTN Ghana:
https://mtn.com.gh/investors/
• MTN Uganda:
https://www.mtn.co.ug/investors/financial-reports/
• MTN Rwanda:
https://www.mtn.co.rw/investors-financial-reporting/
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MTN South Africa
• Service revenue increased by 3.3%
• Outgoing voice revenue declined by 5.5%
• Data revenue increased by 2.1%
• Fintech revenue increased by 61.8%
• Digital revenue increased by 13.6%
• Enterprise revenue increased by 12.3%
• Wholesale revenue increased by 0.1% (including incoming voice revenue)
• EBITDA increased by 2.6% (up 3.0% excluding gain on disposal of towers)
• EBITDA margin decreased by 0.2pp to 36.4% (down 0.1pp to 36.3% excluding gain on disposal of
towers)
• Capex of R13.3 billion on IFRS 16 reported basis (R7.3 billion ex-leases)
Sustained growth momentum in a challenging operating environment
MTN SA delivered a solid performance in an operating environment that remained challenging, with
positive growth across all the main business segments. Despite a slight easing in inflation in the first
nine months to an average 4.9% (2023: 6.0%), and an appreciation in the rand against the US dollar,
South African consumer spend continued to be under pressure and competition in the market
remained intense, especially in prepaid.
Service revenue in the nine-month period increased by 3.3% YoY, with similar growth of 3.3% in Q3,
following on increases of 3.6% in Q2 and 3.0% in Q1. This reflected the topline profile coming up
against stronger base effects in some business areas.
Building on its improved network availability and quality, MTN SA continued to optimise customer
experience and its value proposition, which resulted in improvements in customer satisfaction and
net promoter score. These efforts supported a 6.6% increase in subscribers to 39.2 million, with net
additions of 760k in Q3 and 1.8 million YTD. Postpaid subscriber numbers grew by 2.7% to 4.2 million
(excluding telemetry) and prepaid customers grew by 6.2% to 29.5 million.
In an independent peer group benchmarking of network performance conducted by Umlaut, MTN SA
was awarded the "Best in Test" certification, further establishing MTN as South Africa's best network.
In addition to the overall accolade, MTN SA was also rated "Best in Data", "Best in Voice", "Best in
Crowd-Sourced Quality", and "Best in Reliability". This recognition, awarded across all possible
performance categories, substantiates MTN SA's leading position in the market in terms of network
quality and performance.
Outgoing voice revenue declined by 5.5% (down 5.5% including incoming voice), impacted by reduced
out-of-bundle usage, albeit with a sequential improvement in overall trend in Q3 (down 5.5%
compared to a decline of 6.1% in Q2). This reflected the impact of MTN SA's ongoing commercial
initiatives to optimise the performance of the voice segment, including an increase in XtraTime
penetration to 40.0% in Q3 (Q3 2023: 25.7%).
Data revenue grew by 2.1% YoY, to account for 47.3% of MTN SA's service revenue. The number of
active data users increased by 11.0% to 21.6 million, with growth in network traffic of 32.1% also
driven by higher consumption of fixed wireless access (FWA) data. The development of prepaid data
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revenue continued to be affected by the initiatives implemented to recover legacy XtraTime data
advance balances through data bundles. The effects of this are expected to anniversary in the coming
one to two quarters.
The underlying momentum in the ecosystem supporting data growth remained robust, with continued
growth in customer engagement. An active postpaid subscriber consumed an average of 21.9GB per
month (up 43.7% YoY); an active prepaid subscriber used 3.2GB (up 6.3% YoY) a month.
Consumer postpaid service revenue was 3.5% higher, and up by 4.1% in Q3, reflecting an uptick in
growth momentum (versus growth of 3.4% and 3.0% in Q2 and Q1 respectively). This increase was
supported by strong growth in FWA on the back of initiatives to drive adoption of home propositions
and the uptake of flexible customer-centric offers. Our attractive propositions in FWA have enabled
growth in this segment, albeit at lower effective rates, which we monitor to ensure optimal levels are
maintained.
Consumer prepaid service revenue increased by 1.0%, indicating an expansion of 1.9% in Q3
compared to 0.1% and 1.1% in Q2 and Q1 respectively. The increase was the result of growth in
XtraTime revenue, driven by higher advances made to customers. MTN SA implemented prepaid price
increments between May and July. These are expected to take a few months to normalise as
customers, whose spending power remains under pressure, optimise their consumption. While there
may be a short-term lag, these price increases will enable MTN SA to deliver profitable and sustainable
growth.
MTN SA's Made4U CVM initiatives continued to gain traction, with personalised bundle offerings,
including location-based offers, making up 37.8% of bundle revenue in Q3 (Q3 2023: 29.4%).
The enterprise business unit's service revenue was 12.3% higher, which included a once-off boost
within ICT in Q2. Q3 revenue increased by 7.5% compared to growth of 20% in Q2 and 10% in Q1. The
slowdown in trend in Q3 reflected the effects of the prior period's strong base, as well as increased
pressure on mobile voice revenue on the back of switching from traditional voice to VoIP. Mitigating
this was pleasing growth in bulk SMS and digital mobile advertising revenues in the quarter.
Wholesale revenue (including incoming voice) held broadly steady, being relatively flat compared to
the prior period, with Q3 growth of 0.3%. National roaming revenue decreased by 13.3% YoY,
impacted by renegotiated terms with Cell C from the start of 2024. Excluding incoming voice,
wholesale revenue increased by 1.2%.
Fintech revenue grew by 61.8% YoY, driven by both XtraTime and MoMo. XtraTime was up by 55.7%.
MoMo revenue scaled rapidly off a low base, growing substantially YTD on the back of ongoing
expansion of the product portfolio, including insurance and lending services.
MTN SA's EBITDA grew by 2.6% YoY, including the once-off gain from the disposal of SA towers in
2023; excluding this effect, EBITDA increased by 3.0%. The EBITDA margin of 36.4% was 0.2pp lower
YoY (0.1pp lower to 36.3% excluding the gain on the disposal of SA towers). The EBITDA margin was
impacted by the increased Cell C roaming fee and an increase in the low-margin revenue profile with
the growth in the ICT business.
The result also benefited from exceptional proceeds of R212 million (2023: nil) – reported within the
'other income' total of R403 million (2023: R163 million) – from the sale of insurance receivables.
Excluding both the effects of the gain from the disposal of towers and the impact of sale proceeds
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from the sale of the insurance receivable, EBITDA would have increased by 1.4% and the margin would
have been 0.6pp lower at 35.8%.
MTN SA continued to execute on its aggressive cost optimisation drive to safeguard profitability and
cash flows, underpinned by the expense efficiency programme. MTN SA deployed capex of R7.3 billion,
excluding leases, at an intensity of 18.6%, which enabled the investment in network resilience and
capacity. Including leases, capex was R13.3 billion.
MTN SA outlook
Looking forward, the macroeconomic landscape is showing signs of stabilising and there is general
optimism around the Government of National Unity (GNU) following the national elections in May
2024. However, consumers still face significant challenges, including the ongoing pressure on
disposable income as well as the elevated rate of unemployment.
In this context, MTN SA will continue to focus its efforts on defending and growing the prepaid
segment, with data revenue growth remaining a key priority. The price increments made in prepaid
are expected to take a few months to settle with our customers, as they continue to optimise their
consumption. We thus envisage that the benefits of these adjustments will flow into improved service
revenue growth in the coming quarters.
The base effects hampering prepaid data revenue growth in the near term are projected to normalise
into Q1 2025, which should support an improvement in the development of the overall data segment
thereafter. Supplementing this, MTN SA will continue to drive its home initiatives, leveraging a mix of
technologies to further enhance data growth.
The base effects in national roaming, following renegotiation of the Cell C major agreement in Q1, are
set to continue to put pressure on wholesale revenue into Q4, although this is expected to normalise
from Q1 2025.
Overall, MTN SA will sustain its network capacity and quality to support its commercial efforts and
execute on initiatives to accelerate topline growth across its revenue segments more broadly. This
work will support MTN SA's efforts to restore revenue growth and the EBITDA margin to within its
medium-term guidance ranges, and deliver a healthy cash flow and return profile.
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MTN Nigeria
MTN Nigeria delivered Q3 results – published on 30 October 2024 – reflecting a resilient performance
amid persistent macroeconomic and regulatory challenges. In line with regulatory directives, MTN
Nigeria disconnected 17.5 million subscribers in the first nine months of the year. By end-September
2024, most had been reconnected; the net decrease in the base was 2.7 million.
In this context, MTN Nigeria sustained its commercial momentum to drive broad-based growth across
all revenue segments, demonstrating the underlying strength of the business. Voice and data traffic
grew by 9.8% and 42.1% respectively, reflecting continued strong customer demand.
Service revenue grew by 33.3%*, outstripping inflation. Voice revenue rose by 13.5%* due to higher
usage and CVM initiatives. Data revenue increased by 52.6%* on an expanded user base and higher
data usage, up 31.2% per customer to 11.2 GB.
Fintech revenue rose by 16.8%*, with an acceleration in growth trend in Q3, spurred by XtraTime. The
business streamlined incentive structures in the sales and distribution channels, including the
rationalisation of the sales force to focus on service penetration, improve monetisation and reduce
acquisition costs. While this impacted the evolution of our ecosystem indicators in the short term,
these interventions are expected to enhance the quality and stickiness of the base and, consequently,
the profitability of the MoMo PSB ecosystem.
Revenue from digital services increased by more than 100%* on higher adoption and improvements
to the user journey experience. Enterprise revenue increased by 73.5%*, also on greater service
adoption.
The depreciation of the naira, higher inflation and energy costs and the impact of the introduction of
VAT on tower leases in September 2023 contributed to a 97.0%* increase in operating expenses.
However, numerous initiatives – including ongoing expense efficiency initiatives, including the benefits
from the revised tower lease agreements – helped limit the decline in EBITDA to 5.9%*, with a 15.2pp*
contraction in the EBITDA margin to 36.2%. Excluding the effects of naira depreciation (15.0pp*) and
VAT on leases (2.6pp*), MTN Nigeria's margin would have been 53.8%*.
MTN Nigeria made significant progress on the initiatives outlined at its Extraordinary General Meeting
held in April 2024 to support the recovery of its profitability and capital position. This included the
successful renegotiation of tower lease contracts, reducing the US dollar-indexed component of the
leases linked to a discounted US CPI and removing technology-based pricing, ensuring that payments
for new upgrades will be based on tower space and power usage.
The renegotiated agreements incorporate an energy cost component indexed to the cost of providing
diesel power; however, the terms also include discounts and incentives over the life of the contracts.
In the current period, the accrued opex savings from the effective date of the contract on 1 April 2024
was approximately R603million as at the end of September, and free cash flow savings amounted to
approximately R502 million. Given the nature of the contracts, we anticipate the benefits to opex and
cash flows will be more pronounced in the later years of the lease terms.
In the meantime, we expect an uptick in MTN Nigeria's capex (ex-leases) in Q4 to support the strong
demand, which is driving increased traffic on the network. The industry engagements with authorities
regarding tariff increases for the sector are ongoing, which would support the continued execution of
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initiatives to accelerate MTN Nigeria's earnings recovery profile, strengthen its balance sheet and
restore its net asset position faster.
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Southern and East Africa (SEA) region
The SEA region delivered service revenue growth of 20.2%* YoY, supported by sustained growth in
data (+32.0%*), fintech (+23.7%*) and voice revenue (+13.3%*) as well as an increase in subscriber
numbers by 8.5% YoY to 39.9 million. The blended inflation in SEA averaged 14.4% YTD, compared to
12.2% in 2023.
Overall, the SEA portfolio reported a 1.0pp* decline in the blended EBITDA margin to 44.4%*, with the
expansion in operations such as MTN Uganda and MTN Zambia offset by the decline in MTN Rwanda,
which was impacted by regulatory interventions and aggressive competition in the market.
MTN Uganda published its Q3 results on 4 November 2024 and reported service revenue growth of
20.1%* YoY, underpinned by strong momentum in data (up 30.1%*) and fintech (up 23.5%*) and solid
voice growth (up 13.7%*). The subscriber base grew by 13.3% to 21.6 million.
MTN Uganda's EBITDA increased by 22.4%*. The EBITDA margin expanded by 1.2pp* to 51.7%*,
underpinned by robust topline growth and expense efficiencies.
MTN Rwanda, which published Q3 results on 6 November 2024, reported 5.3% YoY growth in the
subscriber base to 7.6 million. Service revenue grew by 1.6%*, affected by the YoY decline in voice and
data revenue. Fintech revenue grew 25.3%* YoY, underpinned by growth in MoMo advanced services.
MTN Rwanda's data revenue fell by 1.9%*, due to a 10.3% decline in active data subscribers to
2.3 million, impacted by data usage substitution, as a result of subsidised smartphones in the market
not capable of generating data traffic on the MTN network.
MTN Rwanda's Fintech revenue maintained strong YoY growth driven by a 13.4% increase in active
MoMo subscribers. MTN Rwanda reported a decline in EBITDA of 22.8%* and an EBITDA margin of
33.9%* (down 11.0pp* YoY).
MTN Zambia reported service revenue growth of 9.6%*, supported by robust growth in data (up
21.3%*) and fintech including XtraTime (up 13.1%*), which offset a softer voice (down 2.1%*)
segment. The result was achieved against challenging macro conditions and competitive pressures,
with some successful commercial interventions – such as tariff rationalisation in voice and data –
which helped to optimise effective pricing.
MTN Zambia's EBITDA was 15.1%* higher, delivering an improved margin of 24.9*% (up 1.2pp*).
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West and Central Africa (WECA) region
The WECA region recorded service revenue growth of 9.2%* YoY, supported by sustained growth in
data (up 22.5%*) and fintech (up 27.4%*). Voice revenue declined by 9.8%* due to aggressive pricing
by competitors in some markets in the region. WECA added 1.9 million to its subscriber base, despite
the intense competition.
Active data users increased by 10.2% to 37.6 million and active MoMo users rose by 5.9% to
35.7 million. The average blended inflation for the region slowed to 8% (6.2% excluding Ghana) over
the period, compared to 10.3% in Q3 2023.
Overall EBITDA for WECA increased by 15.1%*, with the blended margin up by 2.0pp* to 40.5%*.
Excluding MTN Ghana, WECA service revenue declined by 1.4%*, impacted by challenges in Côte
d'Ivoire and Benin, with the EBITDA margin up by 0.5pp* to 30.8%*.
MTN Ghana, which published Q3 results on 31 October 2024, continued to improve its performance
and delivered service revenue growth of 31.9%*. This was driven by data (up 53.9%*), fintech (up
43.1%*) and digital (up 64.6%*) services and supported by expansion in the subscriber base (up 10.8%)
and investments that enhanced 4G connectivity.
MTN Ghana's EBITDA grew by 32.2%*, with a slight uplift in margin by 0.2pp* to 56.2%. This was driven
by the strong topline performance and efficiency initiatives that mitigated the impacts of cost
increases in the business.
MTN Côte d'Ivoire's service revenue decreased by 8.7%*. Data revenue declined by 0.9%* and fintech
revenue was 2.0%* lower. The EBITDA margin contracted by 1.1pp* to 32.3 %*, impacted by pricing
pressures as well as macro challenges including local currency depreciation and inflation. Initiatives to
enhance customer experience across the network and other touchpoints are being implemented to
improve retention and engagement of our customers. As part of these interventions, the data-focused
propositions have been enriched to boost traffic growth.
MTN Cameroon reported service revenue growth of 12.3%* and maintained leading market share in
a challenging and highly competitive environment. CVM initiatives continued to drive solid growth in
data (+20.1%*) and fintech (+23.6%*) revenue. The EBITDA margin for MTN Cameroon improved by
1.8pp* to 39.2%* due to strong topline growth and expense efficiencies.
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Middle East and North Africa (MENA) region
The MENA region recorded a 48.7%* YoY decline in service revenue – this includes two months of
MTN Afghanistan on a like-for-like basis. The total number of subscribers (excluding Irancell)
decreased by 61.8% to 2.2 million, with active data subscribers decreasing by 54.3% to 0.8 million.
MTN Sudan's service revenue fell by 65.3%* YoY, amid the ongoing conflict in the country, including
a shutdown of the network from February 2024 to May 2024. The EBITDA margin declined to -34.4%*
(2023: 37.7%*), reflecting the decline in topline and inflationary pressure on costs. These effects were
partially mitigated through revenue recovery initiatives underpinned by restoration of the network
where it was safe to do so, as well as expense efficiencies where possible.
MENA reported a blended negative margin of -2.0%* (2023: 35.1%*), reflecting the pressures on the
MTN Sudan business.
Associates, joint ventures and investments
Telecoms operations
Irancell, our 49%-held equity-accounted JV, delivered service revenue growth of 49.9%*, supported
by increased data usage, despite the headwinds facing the business. The EBITDA margin declined by
2.3pp* to 39.1%* due to higher network maintenance costs and continued currency depreciation.
14
Scaling our platforms
Building the largest and most valuable fintech platform
Overall fintech revenue increased by 28.9%* YoY, in line with our medium-term guidance, with strong
performances in Ghana, Uganda, Rwanda and Cameroon. We sustained strong growth in revenue
from advanced services (up 53.1%*) relative to basic services (up 23.0%*). The contribution of
advanced services to total fintech revenue (excluding airtime advance) rose to 29.9% in Q3 (up 0.5pp).
This underpinned an improvement in our fintech EBITDA margin, to the top end of our medium-term
target range of mid- to high-30%s.
MoMo MAU increased by 5.7% YoY to 61.5 million, largely driven by Ghana, Uganda and Rwanda. This
number excludes OTC customers in Nigeria.
Our active agent network declined by 10.9% to 1.2 million, as we streamlined our incentive structures
in the sales and distribution channels (especially Nigeria), with a focus on building a more profitable
and sustainable agent base. Active merchants grew by 3.6% to 1.9 million.
The development of our overall fintech ecosystem continued to be strong, with a 17.4% increase in
transaction volumes to 14.9 billion, and transaction value up by 27.1%* to US$229.2 billion.
Key fintech verticals
Our payments and e-commerce ecosystem grew strongly, as we leveraged our consumer and
merchant footprint, as well as the ongoing development of our value proposition and targeted
marketing campaigns and promotions to drive increased engagement. The total value of merchant
payments made through MoMo rose by 22.6%* YoY to US$12.8 billion. This was supported by growth
in our active payment user base and more use cases in digital payment, supported by our MoMo API
programme.
In BankTech, we facilitated a total loan value of US$1.2 billion, up 67.6%*, as we capitalised on our
scaled mobile wallet business, rich data and customer footprint. Uganda and Ghana were the key
drivers of this performance, with strong growth in both active users and average loan value disbursed
via the lending marketplace.
The total value of remittances grew by 37.4%* YoY to US$3.0 billion. This was driven by accelerated
inbound growth in Benin, Congo-Brazzaville and Ghana; the launch of key regional corridors
connecting Nigeria, Benin, Cameroon, Ghana and Côte d'Ivoire, and focused marketing awareness
efforts and improved customer experience.
InsurTech platform aYo's performance, within our strategic alliance, was driven by our higher-
average-revenue-per-policy focus, the positive performance of the MTN SA device insurance book,
and a sharper focus on high-priority markets.
Bayobab
Bayobab delivered a resilient financial performance with consolidated external revenue increasing by
14.4%* YoY to R5.6 billion. The conflict in Sudan and the depreciation of the naira (which influenced
pricing and traffic) impacted the Communication Platforms' external revenue, which increased by
15.7%*. Fixed Connectivity's external revenue was 3.5%* higher YoY, impacted by the subsea cable
15
cuts and ongoing Red Sea crisis. During the quarter, Bayobab secured new fixed connectivity
infrastructure deals amounting to US$15.3 million.
Outlook
We remain focused on executing on our commercial priorities and broader strategy to deliver on our
medium-term growth ambitions and priorities. As we continue to navigate the near-term headwinds
facing our business, we are encouraged by the overall easing inflation trajectory in our portfolio and
relative stability of local currencies against the US dollar in some markets. As these trends continue to
normalise, we expect this to be positive for consumers and business operations across our markets.
In MTN SA, we will continue to monitor the effects of price adjustments in prepaid on usage and churn,
to safeguard value share in the market and ensure sustainable growth over the medium term. Our
priority remains to accelerate topline growth and the EBITDA margin profile towards the targeted
medium-term ranges, as well as deliver attractive cash flows and returns.
MTN Nigeria will continue to implement the initiatives to recover its profitability profile and restore
its capital position, including engagements with authorities around tariff increases for the industry.
The revised terms of tower lease contracts position MTN Nigeria well to better manage the impacts
of macro volatility on the business over the medium term.
Given the nature of the contracts, we expect to incur higher depreciation and finance costs in the early
stages due to the extension of the lease period to 31 December 2032, but the benefits will be more
pronounced in the later years. However, over and above the terms that mitigate volatility in forex and
inflation, we anticipate additional cost and cash flow benefits from the discounts built into the new
lease agreements with IHS over the duration of the contracts, starting in 2025. These benefits are
anticipated to accrue over the term of the lease contracts.
In the Markets portfolio, we expect MTN Ghana and MTN Uganda – as significant contributors to
overall Group revenue and profits – to continue to underpin our growth profile. The work is ongoing
to turn around the performance of other markets, where operations have been hampered by
economic and regulatory headwinds, as well as increased competitive aggression in some instances.
Within our platforms, we are pleased with the accelerated growth in our fintech business and
committed to sustaining that momentum, particularly through continued strong growth in advanced
services.
Our overall medium-term guidance framework and anticipated ordinary dividend of 330cps remains
unchanged, including our target of R7-8 billion in expense efficiencies between 2024-2026. As we
deliver on our strategy, with capital allocation discipline, we will continue to invest in the growth of
connectivity and platform businesses and anticipate deploying capex of between R28-33 billion in FY
2024.
We are excited by the medium-term growth opportunities presented by our markets and remain
committed to executing on our strategy to unlock value for our stakeholders.
16
Q3 2023 trading update teleconference
MTN will be hosting a teleconference on Thursday 14 November 2024, at 15.30 Central African Time
(CAT), where we will unpack the Group's trading update for the nine months ended 30 September
2024. To participate, please register here: https://www.corpcam.com/MTN14112024
The accompanying data sheets can be found at:
https://www.mtn.com/financial-results/?report_cat=quarterly-results
14 November 2024
Fairland
Lead sponsor
Tamela Holdings Proprietary Limited
Joint sponsor
J.P. Morgan Equities (SA) Proprietary Limited
Abbreviations:
CVM: Customer value management
FWA: Fixed wireless access
GB: Gigabyte
Holdco leverage: Holdco net debt (including Bayobab)/SA EBITDA + cash upstreaming
KPI: Key performance indicators
MAU: Monthly active users
PB: Petabyte
PSB: Payment service bank
SIM: Subscriber Identity/Identification Module
17
Date: 14-11-2024 07:05:00
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