In the face of a complex and challenging operating environment, MTN Group Limited has unveiled its reviewed interim financial results for the first half of 2023, showcasing impressive growth and resilience.
Financial Performance Highlights:
The pan-African mobile operator reported a series of robust financial metrics for the first six months of the year:
| Metrics | Growth/Change |
|---|---|
| Group Service Revenue | +16.5% (15.1%* in local currency) |
| EBITDA (Before one-off items) | +12.0% (13.5%* in local currency) |
| EBITDA Margin | 43.6% (1.7 pp lower) |
| Profit Before Tax (PBT) | -1.4% (+6.1%* in local currency) |
| Basic Earnings Per Share (EPS) | +14.8% |
| Reported Headline Earnings Per Share (HEPS) | +7.1% |
| Total Subscribers | +3.6% |
Strategic Moves:
One of the key strategic announcements was the Memorandum of Understanding (MOU) between MTN and Mastercard. The MOU involves a minority investment into MTN Group Fintech, valuing the business at $5.2 billion. This partnership not only signifies confidence in MTN’s fintech potential but also lays the foundation for accelerating payments and remittance services.
Challenges and Strategies:
The CEO acknowledged the challenging trading environment marked by elevated inflation and forex volatility in key markets, particularly Nigeria. The Nigerian reforms presented additional short-term burdens on consumers and businesses. However, MTN’s ongoing expense efficiency program helped mitigate some of these impacts, achieving sustainable cost savings of R702 million during the period.
Balancing Act:
While the company’s net-debt-to-EBITDA ratio remained well within covenant limits, MTN’s holding company (Holdco) leverage increased. The rise was attributed mainly to currency depreciation and the election of scrip dividend options from MTN Nigeria and MTN Ghana for the FY 22 dividends. Despite this, MTN maintained a positive liquidity position, boasting a headroom of R40.9 billion.
Future Outlook:
MTN remains committed to its Ambition 2025 strategy, focusing on medium-term growth objectives despite ongoing challenges. The company anticipates continued recovery in MTN SA’s performance in the second half of the year. However, the environment’s volatility, especially inflation and forex dynamics, may impact EBITDA margins and earnings. MTN aims to pursue R7-8 billion in additional efficiency savings over three years from 2024, over and above the targeted R1.5 billion for FY 2023. The guidance for 2023 capex is revised up to R40.1 billion, reflecting ongoing investment in 4G and 5G rollout, particularly in Nigeria.
Conclusion:
MTN Group’s interim financial results reveal a company steadfast in its commitment to growth, innovation, and strategic partnerships. As Africa’s digital landscape evolves, MTN’s resilience and strategic foresight continue to position it as a pivotal player in shaping the continent’s digital future.
