MTN has almost caught up with Vodacom in terms of financial performance, according to its latest year-end results released last night.
The MTN Group`s total revenue for the year to end-March rose by 56% to R19.4 billion, not far off Vodacom`s year-end revenue of R19.7 billion, while its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 71% to R6.2 billion, close to Vodacom`s figure of R6.7 billion.
The most impressive growth was in after-tax profit, which soared by 305% to R2.2 billion, compared with Vodacom`s after-tax profit of R2.3 billion. A year earlier, MTN`s R548 million profit after tax was considerably lower than Vodacom`s after-tax profit of R2.4 billion.
MTN`s attributable earnings increased by 226% from R592 million to R1.93 billion.
MTN Group CEO Phuthuma Nhleko says the operations of MTN International contributed significantly to the growth, with both MTN Cameroon and MTN Nigeria being profitable after tax.
"MTN International`s operations in Uganda, Rwanda, Cameroon, Swaziland and Nigeria continue to perform above expectations. In line with the set objective of diversifying its income sources, the group now derives 36% of its revenue and 38% of its adjusted headline earnings from its non-South African operations," Nhleko says.
Leading the pack is Nigeria, which contributed R1.15 billion profit after tax to the R1.19 billion profit after tax contributed by MTN International.
Nigeria`s subscription base jumped from 609 000 last year to 1.04 million users, with MTN Nigeria holding an estimated market share of 59%. Cameroon also posted an increase of more than 100 000 users to 431 000, while SA`s subscriber base continued to climb towards the 5 million mark, reaching 4.72 million. Overall, the total number of subscribers has grown to 6.72 million.
Nhleko says MTN Nigeria has huge growth potential. The network currently covers only 14% of the country, reaching about 38% of the population. However, Nhleko says the strong demand for services has resulted in higher congestion, forcing management to slow growth in subscribers in order to allow the network roll-out to catch up with the demand.
While MTN International performed well, Nhleko says MTN SA experienced a challenging year in a difficult market. While revenue increased by 23% to R12.3 billion, EBITDA grew by a modest 6% to R3.39 billion.
"Although MTN SA is expected to continue to generate strong cash flows, management is implementing strategies to optimise performance to meet the challenges of a maturing market," Nhleko says.
He says the strengthening of the rand had a positive impact on net debt, reducing it from R4.2 billion to R2.7 billion, although the rand`s strong performance reduced the trading performance on the translation of foreign entities.
In light of the good performance by MTN International, Nhleko says MTN will continue to explore value-enhancing opportunities on the continent in line with its vision of becoming the leading provider of communication services in Africa.
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