MTN grows revenue and subscribers in South Africa

MTN Group has published its annual results for 2021, showing a substantial increase in service revenue and subscribers in South Africa.

MTN South Africa reported growth in service revenue of 6.5% from R37.024 billion to R39.446 billion thanks to healthy performance in the prepaid, postpaid, enterprise, and wholesale businesses.

“This performance was achieved in a challenging macroeconomic and consumer backdrop and increasing unemployment rates in industries such as hospitality and tourism,” MTN stated.

“MTN SA was also impacted by shifts in customer spending patterns as lockdown restrictions abated and the movement of people increased. This intensified the competition for share of the consumer’s wallet.”

The operator’s subscribers increased by 3 million to 35 million during the year, which MTN said was an indication that churn had stabilised.

2.4 million of the new customers were on prepaid packages, while the contract base increased by 456,000 subscribers.

MTN South Africa had 27.6 million prepaid subscribers and 7.4 million contract customers at the end of the year.

MTN SA’s consumer postpaid business recorded service revenue growth of 4.5%.

“The focus on subscriber additions driven by channel expansion, well-managed churn and a consistent drive of SIM-only and data-orientated packages contributed to this growth,” MTN said.

While the prepaid business saw substantial increases in data revenue, this was offset by a decline in voice revenue, challenging macroeconomic conditions, and an increased split of consumer wallet share. That resulted in service revenue only increasing by 2.1% in the fourth quarter.

The enterprise and wholesale businesses achieved double-digit growth, with service revenue surging by 16.8% and 21.7%, respectively.

MTN explained that its enterprise division was driven by fixed data deals, strengthening its small-to-medium enterprise customer value management initiatives, and sustained recovery of the ICT business.

The wholesale growth was attributed to MTN’s national roaming deals with Cell C and Telkom.

The MoMo fintech business grew to 4.2 million registered users and 602,000 monthly active users on 31 December 2021.

MTN Momo headline

MTN South Africa’s earnings before interest, taxes, depreciation (EBITDA) was R19 billion in 2021, up 6.8% year on year, with an EBITDA margin of 38.9%.

Profit after tax was R4.7 billion, up 82.1% from the year before, benefiting from lower finance costs and operational improvements.

Across the entire Group, MTN recorded service revenue of R171.8 billion compared to R170.1 billion in 2020.

The Group’s reported EBITDA margin was 41.9% compared to 45.3% in December 2020.

The 2021 figure included several non-operational items totalling a net loss of R4.6 billion, including gains on disposal/transition of assets (R1.8 billion), loss on remeasurement/deconsolidation of MTN Syria (-R4.8 billion), impairment of MTN Yemen (-R0.6 billion), Covid-19 donations (-R0.5 billion) and arbitration settlement (-R0.5 billion).

Basic earnings per share (EPS) decreased by 19.3% to 763 cents.

“2021 EPS were impacted by impairment losses of 64 cents relating mainly to MTN Yemen and derecognition losses relating to MTN Syria of approximately 262 cents,” MTN said.

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MTN grows revenue and subscribers in South Africa