Wrap Text
Reviewed interim financial results for the six-month period ended 30 June 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)
Reviewed interim financial results for the six-month period ended 30 June 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 18 markets and are inspired by our belief that everyone
deserves the benefits of a modern connected life.
H1 2024 Key Messages
• Strong commercial momentum drove solid growth within the portfolio
• Continued expansion of fintech platform drove robust advanced services growth
• Executed key strategic initiatives, including localisations and orderly market exit
• Resilient underlying performance masked by macro impacts on financials
• Sustained balance sheet resilience and flexibility
• Medium-term guidance maintained
Results Salient Points
• Group service revenue decreased by 20.8% (up 12.1%*, in constant currency) to R85.3 bn
(H1 2023: R107.7 bn)
• EBITDA (before once-off items) decreased by 41.2% (down 0.4%*, in constant currency) to
R29.0 bn (H1 2023: R49.4 bn)
• EBITDA margin lower by 11.6 percentage points (pp) to 32.0% (4.4pp* lower to 36.5%*, in
constant currency)
• Basic earnings per share (EPS) decreased by 278.6% to -409cps (restated H1 2023: 229cps)
• Reported headline earnings per share (HEPS) decreased by 198.5% to -256cps (restated H1 2023:
260cps)
• Total subscribers increased by 0.8% to 288 million
• No interim dividend declared (H1 2023: nil)
* Constant currency information after accounting for the impact of the pro forma adjustments as defined and included throughout this results
announcement. Constant currency view is shown at 2024 rates and excludes the impact of hyperinflation.
% change
% change Constant
Rm H1 24 H1 23 Reported currency
Group service revenue 85 323 107 735 (20.8) 12.1
- South Africa 21 110 20 431 3.3 3.3
- Nigeria 20 523 43 583 (52.9) 32.4
Group EBITDA~ (before once-off items) 29 046 49 407 (41.2) (0.4)
- South Africa# 9 566 9 173 4.3 4.3
- Nigeria^ 7 377 23 260 (68.3) (10.8)
Group EBITDA margin 32.0% 43.6% (11.6pp) (4.4pp)
- South Africa# 36.5% 36.1% 0.4pp 0.4pp
- Nigeria^ 35.7% 53.1% (17.4pp) (17.4pp)
Capital expenditure (capex, IFRS 16) 19 220 33 764
- Capex (ex-leases) 13 433 17 232
- Capex intensity (ex-leases) 14.8% 15.2%
~ Earnings before interest, tax, depreciation and amortisation.
^ MTN Nigeria performance impacted by material naira devaluation against the US$.
# Excludes once-offs, including gains and losses on disposals. Includes exceptional
sale of insurance receivable.
Unless otherwise stated, financial and non-financial growth rates are presented on a constant currency basis and are year-on-year (YoY,
6M to June 2024 versus 6M to June 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. Commencing 1 January 2024, MoMo PSB Nigeria discloses MAU
which includes only active MoMo wallet users and now excludes over-the-counter (OTC) customers. For comparative purposes, a total
monthly active MoMo user figure has been disclosed showing MAU including and excluding OTC customers.
Non-financial numbers included in this results announcement are reported excluding Afghanistan in the base year following the Group's exit
in February 2024. MTN Afghanistan results have been disclosed up to February for 2024. As a result the 2023 comparatives include the results
for the two months ending February 2023.
Group President and CEO Ralph Mupita comments:
Encouraging underlying operational momentum
"MTN delivered a solid underlying performance in H1 2024, with pleasing progress in some key
markets. This result, achieved against a challenging macro backdrop, was underpinned by the
continued execution of our commercial initiatives and Ambition 2025 strategy.
The momentum of our business was reflected in the continued growth of our ecosystem, with data
traffic and fintech volumes up by 35.7% (36.7% excluding JVs) and 18.0%, respectively. In H1, we
deployed R13.4 billion of capex, reflecting a capex intensity of 14.8%, largely reflecting lower spend by
MTN Nigeria, as the Opco focused on reducing its exposure to US dollar denominated obligations. In
the period, we rolled out 1 556 4G and 829 5G sites. Our focus on network quality and competitiveness
has underpinned the NPS position in our consolidated markets.
Solid H1 2024 results achieved in challenging operating environment
Our subscriber base ended the period at 288 million with headwinds from subscriber registration
regulations in markets such as Ghana and Nigeria, the decline in subscribers in Sudan amidst the
ongoing conflict and our exit from Afghanistan. In terms of momentum, the underlying growth in our
customer base excluding Sudan and Afghanistan was 3.2% YoY (3.1 million net additions in the period).
Active data subscribers were up 9.2% to 150.2 million (up 10.0% excluding JVs), while MoMo MAU
(excluding OTC customers) rose by 10.6% to 62.6 million.
The Group delivered solid service revenue growth of 12.1%*, with pleasing expansion in data (up
21.0%*) and fintech (up 27.2%*) revenues. Within fintech, advanced services continued to grow
strongly and reported an increase of 58.2%*. The EBITDA margin of our fintech business was achieved
within our target range of mid to high-30%.
EBITDA softened marginally by 0.4%*, reflecting an EBITDA margin of 36.5%* (H1 2023: 40.9%*),
which was impacted by the overall headwinds to topline and upward cost pressures from macro factors
headwinds. We partially mitigated these with the execution of our expense efficiency programme, with
savings of R2.4 billion realised in the period. Adjusting for MTN Sudan, service revenue would have
grown by 13.6% (H1 2023: 14.7%*), with an EBITDA margin of 36.9%* (H1 2023: 40.9%*).
Outlook, priorities and medium-term guidance
Notwithstanding the prevailing macroeconomic and geopolitical conditions affecting our trading
environment and business, we remain resolute in executing on our commercial and strategic priorities.
We are working to accelerate expense effciencies to help manage the prevailing macro headwinds, in
terms of which we continue to target R7-8 billion in cost savings over the next three years.
The completion of its network resilience plan during H1 provides a strong foundation for MTN SA to
support growth against the macroeconomic headwinds, which continue to place pressure on consumer
spend. This is also driving the ongoing evolution in customer behaviour to optimise consumption of
bundles. Notwithstanding, we will continue the work to accelerate topline and deliver a healthy
EBITDA, PAT and cash flow profile.
MTN Nigeria will press ahead with the initiatives outlined to restore its profitability and balance sheet
profile, particularly in resolving its negative equity position. Tariff increases remain critical to the
recovery and sustainability of the industry in Nigeria and sector engagements with the relevant
authorities are ongoing.
In our Markets portfolio, the priority is to sustain the strong growth in markets like Ghana, Uganda
and Cameroon; while implementing the necessary initiatives to turn around the performances in Côte
d'Ivoire, Rwanda and Zambia.
In our platform businesses, we will leverage partnerships to accelerate growth and commercial
monetisation. In fintech, we are scaling the business through sequential launches of commercial
initiatives with Mastercard across various markets in the remainder of the year, with a focus on
maintaining the strong momentum in advanced services growth.
We are making good progress in the commercial roll-out of our card issuance and acceptance in line
with our partnership with Mastercard. We are prioritising seven markets in our card issuance roadmap
and four markets for card acceptance during 2024.
We maintain our overall medium-term guidance framework, with capex for FY 2024 anticipated to be
in the R28-33 billion range. We will continue on the execution of our Ambition 2025 strategy to drive
growth and unlock value for all our stakeholders over the medium-term. The Board anticipates paying
a minimum ordinary final dividend of 330 cents per share for FY 2024"
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 results announcement 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.
The pro forma financial information presented in the interim financial results for the period ended 30 June 2024, has been prepared excluding
the impact of impairment of goodwill, PPE, intangibles and associates, impairment loss on remeasurement of disposal group, gain on
disposal/dilution of investment in JV/associate/ subsidiary and fair value gain on acquisition of subsidiary, net gain (after tax) on disposal of
SA towers, net profit on disposal of PPE and intangibles, hyperinflation, impact of foreign exchange losses and gains, deferred tax asset
remeasurement and other non- operational items (collectively the "Pro forma adjustments") and constitutes pro forma financial information
to the extent that it is not extracted from the segmental information included in the reviewed consolidated financial results for the six months
ended 30 June 2024. This pro forma financial information has been presented to eliminate the impact of the pro forma adjustments from the
consolidated results for the period ended 30 June 2024 to achieve a comparable year-on-year (YoY) analysis. The pro forma adjustments
have been calculated in terms of the Group accounting policies disclosed in the consolidated financial statements for the year ended 31
December 2023.
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 after translating prior year results at current year rates. In addition, in respect of MTN Irancell, MTN Sudan
and MTN South Sudan the constant currency information has been prepared excluding the impact of hyperinflation. The economies of Sudan,
South Sudan and Iran were assessed to be hyperinflationary for the period under review and hyperinflation accounting was applied.
The Group's consolidated 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, Guinea
Conakry and Guinea Bissau. 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.
Proposed extension of terms of MTN Zakhele Futhi Broad-based Black
Economic Empowerment (B-BBEE) transaction
Our Level 1 B-BBEE statuses for both MTN SA and the Group, underscore our dedication to creating
shared value in the markets we serve. We remain committed to continuing the important work of
improving the lives of our communities.
The MTN Zakhele Futhi BEE scheme (MTNZF) is scheduled to mature on 22 November 2024. As such,
MTN Group and MTNZF propose to extend the period of the scheme for a further three years, to
November 2027. The proposed extension is in line with MTN's commitment to transformation and
creation of shared value for South Africans. B-BBEE is integral to the ethos of MTN and MTN believes
that B-BBEE participation is important to the future success of the Group. The proposed terms and
structure of the extension are set out in a joint announcement, that has been published on the Stock
Exchange News Service of the JSE for shareholders of MTN and MTNZF.
H1 2024 financial results teleconference
MTN will host a presentation on Monday, 19 August 2024 where we will unpack the Group's results
for the six months to 30 June 2024. To participate, please register here:
https://themediaframe.com/mediaframe/webcast.html?webcastid=zqGB3sfQ
The accompanying slides will be made available on the MTN website from 15:00 CAT.
Results announcement
This results announcement is the responsibility of the directors and is a summary of the full interim
results. The interim results have been reviewed by the Company's external auditors, Ernst & Young
Inc., who have expressed an unqualified review opinion thereon.
Any investment decisions should be based on the full interim results as the information in this results
announcement does not provide all the details and investors and/or shareholders are encouraged to
review the full interim results which are available through the JSE cloudlink at:
https://senspdf.jse.co.za/documents/2024/JSE/ISSE/MTN/MTNH124.pdf and on MTN's website at:
https://www.mtn.com/financial-results/?report_cat=annual-results. Copies of the interim results may
also be requested by emailing investor.relations@mtn.com.
19 August 2024
Fairland
Lead sponsor
Tamela Holdings Proprietary Limited
Joint sponsor
J.P. Morgan Equities (SA) Proprietary Limited
Date: 19-08-2024 07:05:00
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