MTN Group Records Resilient Growth in Challenging First Half of 2023 Across Key Markets

MTN Group shows resilience amid challenges, reports solid growth in service revenue, subscriber base, and data usage.

Group President and CEO Ralph Mupita reflected on MTN’s performance in the first half of 2023, acknowledging the challenges posed by the macroeconomic, geopolitical, and regulatory landscapes across their markets. Mupita emphasized the company’s commitment to executing their Ambition 2025 strategy, which has demonstrated the resilience of their business model.

In the first half of 2023, MTN continued to demonstrate the resilience of its business model through the execution of our Ambition 2025 strategy. Operating conditions remained challenging due to ongoing pressures in the macroeconomic, geopolitical and regulatory environments across our markets.

Ralph Mupita, Group President and CEO, MTN

In South Africa, while experiencing a decrease in loadshedding compared to Q1 2023, power outages continued to impact business operations. The first half of 2023 saw 181 days of loadshedding, a notable increase from the 68 days experienced in H1 2022. MTN’s focus on enhancing network resilience led to improvements in network availability and Net Promoter Score (NPS) during the period. The company also surpassed its resilience rollout plan, resulting in positive trends in traffic and service revenue in Q2 compared to Q1.

In Nigeria, swift structural reforms were implemented following President Tinubu’s inauguration. Notable changes included the removal of the government fuel subsidy on May 31, 2023, and the introduction of a free float of the naira in the Nigerian Foreign Exchange Market on June 14, 2023. These reforms are anticipated to have a positive impact on the Nigerian economy, supporting MTN Nigeria’s investment case in the medium to long term. Despite the challenging trading environment, MTN Nigeria reported growth in data traffic and fintech transaction volumes.

The Group’s financials for the first half of 2023 demonstrated steady growth, with service revenue increasing by 15.1%. Overall Group EBITDA saw a 13.5% increase, maintaining an EBITDA margin of 44.0%. Elevated inflation and forex depreciation placed upward pressure on costs, particularly in Nigeria due to recent reforms. However, the business managed to partially offset these impacts through an expense efficiency program, resulting in sustainable cost savings of R702 million.

MTN’s operational results were bolstered by a resilient subscriber base, which grew by 3.6% to reach 291.7 million. Active data subscribers saw a notable 7.4% increase to 139.5 million, contributing to a growth of 23.6% in data revenue. In the fintech sector, the user base held steady at 60.5 million, while fintech service revenue saw a 21.7% increase, reflecting positive momentum in the overall ecosystem.

The Group maintained a healthy balance sheet and liquidity position, with net-debt-to-EBITDA at 0.4x as of June 30, 2023. The holding company’s leverage increased to 1.5x, mainly attributed to currency fluctuations and dividend election options. The Group’s liquidity position remained strong, with R40.9 billion in headroom as of June 30, 2023.

In light of the foreign exchange liberalization in Nigeria, the Central Bank’s announcement on June 14, 2023, led to significant movements in the exchange rate. While this had an immediate impact on MTN Nigeria’s results, the full effects are expected to be realized in H2 2023.

The conflict in Sudan has posed challenges for MTN Sudan’s performance, impacting its contribution to Group EBITDA. MTN continues to monitor the situation, prioritizing the safety and well-being of employees, customers, and communities.

Despite these challenges, MTN Group reported resilient results for the first half of 2023, in line with their medium-term targets. The company remains focused on maintaining positive growth and adaptability in a dynamic operating environment.

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