Strong results for MTN
Telecommunications operator MTN Group on Thursday reported a 33% increase in adjusted headline earnings per share to 904.4c for the year ended December 2008 from 681.9c a year ago. Basic HEPS increased by 43% to 836.5c.
A cash dividend of 181c share has been declared.
Demand for mobile services continued to impress on the upside in key markets amidst the global economic slowdown which negatively impacted many other sectors in 2008, it said. The group recorded 90.7 million subscribers at end December 2008, compared with 61.4 million at the end of December 2007.
The 48% increase was driven largely by MTN Irancell and MTN Nigeria, which added 10 million and 6.6 million subscribers respectively, it said.
Group revenue was up 40% to R102.5bn driven by the strong growth in subscribers and the relative appreciation of operating currencies to the rand. As a result of strong revenue growth earnings before interest, tax, depreciation and amortization (Ebitda) increased by 36% to R43.2bn.
Profit after tax was up 43.8% to R17.135bn.
MTN said a strong focus on operational performance as well as continued improvements in the roll-out of infrastructure enabled it to sustain or improve its market position in increasingly competitive environments.
MTN Group incurred expenditure of R28.3bn on capex in 2008, an 84% increase over 2007 and in line with dollar denominated guidance.
MTN continued to focus on evolving its networks and actively seeking infrastructure, transmission and site sharing opportunities across its operations. It also invested approximately R250m to gain access to significant submarine cable capacity through the SAT-3, WACS, EASSy and EIG initiatives.
In addition to sound operational performance, the depreciation of the rand against the dollar resulted in the effective appreciation of many African and Middle Eastern currencies against the Rand for a major portion of the year, positively affecting the net trading results of MTN Group by approximately 15%.
The group reports its performance by region, namely South and East Africa (SEA), West and Central Africa (WECA) and the Middle East and North Africa (MENA). The WECA region continues to be the largest contributor to group revenue making up 47% of total revenue, compared with 42% in the prior financial year, while SEA and MENA contributed 37% and 17% respectively.
Average revenue per user per month (ARPU) declined marginally in most operations in 2008, which is consistent with increased penetration into lower usage segments.
The WECA region is the largest contributor to group Ebitda and increased its contribution by 7 percentage points to 59% at end December 2008. The SEA region contributed 30% to group Ebitda and MENA contributed 11% of group Ebitda, increasing its contribution by 3 percentage points from December 2007. MTN Group’s Ebitda margin declined by 1.4 percentage points to 42.1%.
MTN said it was pleasing that MTN Irancell’s Ebitda margin turned positive to 30.2% from negative 13.4% as the business picked up critical mass. The South Africa Ebitda margin dropped 2 percentage points to 32.8%, as a result of management’s strategic decision to invest in distribution.
Looking ahead, MTN said it remains cautiously optimistic about its prospects for 2009 in challenging trading conditions.
Strategic priorities include actively seeking value-accretive expansion opportunities in emerging markets, with a potential to act as a consolidator in the current market environment, tightly monitored capital expenditure to ensure appropriate levels of capacity and quality of service for an enlarged market and the optimization of cash and operational efficiencies ensuring that the group is able to benefit from a rapidly evolving technology market while maximizing infrastructure sharing.
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