MTN SA takes a knock

MTN has reported a 12% rise in group revenue to R137 billion in financial results for the year ended December 2013, however, its South African operation saw an earnings decline.

Group subscribers increased 9.8% to 207.8 million, and data revenue increased 41.4% to R20.7 billion, MTN said.

Headline earnings per share (HEPS) increased 27.3% to R13.86, and the group delivered a final dividend of 665 cents per share, with a total dividend of R10.35 per share.

Operating profit rose to R40.5 billion, from R36.7 billion before.

In South Africa, revenue dropped to R39.7 billion, from R41.3 billion in 2012, with ebitda down to R13.4 billion, from R14.5 billion before.

MTN said its pre-paid subscriber base declined by 1.1%, bringing the total pre-paid base to 20.7 million subscribers in SA.

Most of the subscriber loss reported earlier in the year was recovered in the second half, MTN said.

The post-paid segment increased its subscriber base by 11.3% to 5.0 million.

The group said that the local revenue decline was impacted by a R1.888 billion
adjustment made to revenue as a result of management reviewing the accounting treatment for handset sales.

Excluding this adjustment, revenue declined by 1.6% (including MTN Business). “This was mainly a result of lower outgoing voice revenue, which declined by 8.3% to R19.327 billion,” MTN said.

Data revenue, including MTN Business, increased by 20.2% to R8.8 billion and contributed 22.2% to total revenue.

The number of  smartphones on MTN’s network in SA increased by 32.6% to 7.3 million, and the number of data users increased by 6.4% to 14.3 million.

Capex for the period amounted to R5.8 billion, which mainly related to improving quality and capacity on 2G and 3G networks, MTN said.

During the year, MTN SA added 516 new 2G sites and 1,133 co-located 3G sites. The 3G population coverage improved sharply and is now 75.8%.

“The group faced a number of challenges, including aggressive price competition and increased regulatory pressures in many of our key markets,” MTN said.

MTN Nigeria grew its subscriber base by 19.7% in 2013, bringing total subscribers to 56.8 million at the end of December, and representing MTN’s largest territory.

MTN Nigeria also grew revenue to R48.2 billion, from R38.7 billion in 2012.

MTN Irancell delivered a satisfactory performance, increasing its subscriber base by 2,2% to 41.4 million. “This subdued growth was mainly the result of high levels of mobile penetration and increased competition,” the group said.

Looking ahead, MTN said that while the South African business delivered disappointing results, the executive team is focused on helping this business deliver an improved overall performance in the year ahead.

“We continue to explore opportunities to expand our product offering outside of traditional voice and expect to increase our presence in the digital space by leveraging technology and maximising the opportunity of low internet penetration in our markets.”

“We continue to transform our organisation through cost optimisation and increasing operational efficiency which will help the delivery of sustainable returns for all our stakeholders, MTN said.

Value-accretive M&A opportunities will continue to be explored, the group said.

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MTN SA takes a knock