MTN targets further growth

Johannesburg, 30 Mar 2007

JSE-listed cellular operator MTN wants to increase its subscriber base by almost half this year.

Group CEO Phuthuma Nhleko says the company aims to grow its 40.1 million subscriber base by 41% by year-end. In September 2006, MTN had a total of 35 million subscribers, up from 20 million in 2005.

MTN's latest subscriber figures, a 73% increase on the previous period, were aided by its recent acquisition of Investcom, which added eight million customers to its base.

The cellular operator plans to add 16.5 million subscribers through acquiring 3.5 million customers in Nigeria, 900 000 in Ghana, 5.5 million in Iran, 850 000 in Sudan, and two million in SA. The rest of its operations are expected to add 3.8 million subscribers.

Diversification

Nhleko says MTN's strategy is to diversify its subscription base through acquisitions.

"We are in a position to keep looking at opportunities." He says the subscriber base is still heavily weighted by SA and Nigeria, and the company aims to move away from this situation.

Currently, 12% of subscribers are in the Middle East and North Africa (MENA), 49% in West and Central Africa, and 39% in the South and East Africa.

The MENA region will become a larger contributor in 2007 as Sudan, Afghanistan and Iran move out of the start-up phase, he notes.

Growth on growth

Group FD Rob Nisbet says the company's revenue line has grown by 28% on a compound basis in the last three years. Stripping out Investcom's contribution, this would be a compound annual growth rate of 24%.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 38% on the same basis. Without Investcom, this would be 34%.

MTN grew revenue 49% when compared to the previous nine-month period. Excluding Investcom, this would be growth of 32%. Seventy-three percent of its revenue comes from subscriber spend. Profit after tax grew 80%, and 87% without Investcom.

However, the company points out the results are not directly comparable as the company shifted year-ends and has normalised some figures for the purposes of comparison.

EBITDA grew 53%, to R22.4 billion, and its EBITDA margin increased to 43.4%, from 42.4%. Nhleko says the company aims to hit a margin of 45% in the medium-term.

MTN's shares moved up 2.07% by 13.43pm yesterday and were trading at R93.65 after six million shares had changed hands. Its shares closed at R91.75 on Tuesday, having settled after reaching a new 12-month high of R99.25 in intra-day trading on Monday.