MTN reports huge profits
MTN has released its annual results and reported a 42.8% increase in profit across the group from R17 billion in 2021 to R24.3 billion in 2022.
In South Africa, revenue increased 3.9% from R48.7 billion to R50.6 billion, with service revenue increasing 3.6% from R39.4 billion to R40.8 billion.
Data revenue in South Africa increased 13.1% from R16.5 billion to R18.6 billion, while fintech revenue decreased 2.8% from R1.09 billion to R1.06 billion.
EBITDA in South Africa increased 4.7% to R19.9 billion.
“This included the gain on disposal of SA towers,” MTN stated.
“Excluding this effect, EBITDA would have been up by 2.8%, and the EBITDA margin would have been 38.5% (down 0.4pp).”
MTN said that its South African business was resilient despite strong economic headwinds.
“South Africa faced numerous challenges in 2022, with the economy remaining under significant pressure with the growth outcome for the year estimated to be sluggish at 2.1% (2021: 4.9%),” the company stated.
“Inflation averaged 6.8% in the year (2021: 5.9%), exacerbated by the rand which depreciated by 10.5% against the US dollar.”
MTN said this put pressure on consumer spending and costs in the business.
“The South African Reserve Bank (SARB) hiked interest rates by 3.0pp during the year — with the prime lending rate closing 2022 — at 10.5%, aimed at containing escalating inflation which has trended above the SARB’s target range of 3–6% since June 2022.”
In April 2022, some parts of the country experienced devastating floods.
“These impacted lives and livelihoods as well as MTN SA’s network infrastructure, also slowing the Opco’s ability to access and restore affected sites at the time.”
MTN noted that the frequency and severity of load-shedding worsened as the year progressed.
Of the total 208 load-shedding days in 2022, the country experienced 146 in the first half of the year, of which 91 were in the fourth quarter.
“This put an enormous strain on the MTN SA network, impacting availability as well as some business functions including those supporting recharge and upgrade activity,” MTN stated.
“These dynamics weighed heavily on consumer disposable income, spending patterns and sentiment, as well as costs in our business and our ability to operate.”
MTN South Africa reported subscriber growth of 4.4% to 36.5 million, a net addition of 1.5 million.
This included 12.5% growth in postpaid subscribers to 8.3 million.
Its prepaid customers increased by 2.3% to 28.3 million.
MTN South Africa said its revenue growth was also supported by a 7.2% increase in the number of active data subscribers to 18.9 million, with data traffic rising 33.2%.
It also reported reducing the overall consumer tariffs for data, with the average price of 1GB of prepaid 30-day data down by 11.6% in the year.
MTN South Africa grew its residential subscribers by 127.3% year-on-year to 68,000 as part of its “Own the Home” push.
“This was enabled by growing sales through open access home fibre as well as growing our 5G and Tarana footprint,” MTN said.
Consumer postpaid service revenue increased 3.2%, driven by the growth in subscriber numbers and the sustained uplift in data consumption.
MTN SA’s consumer prepaid business recorded service revenue growth of 0.3% in 2022. This was supported by strong data demand and achieved in spite of the pressure on voice revenue from load-shedding.
Its enterprise business continued to deliver double-digit service revenue growth, supported by growth in mobile data revenues, bulk SMS and IoT. It grew by 17.5% year-on-year.
“The core mobile business benefited from enhanced data product propositions as well as the expansion of the distribution channel,” MTN said.
Its wholesale business recorded 5.3% revenue growth on the back of national roaming deals with Cell C and Telkom.
“In September 2022, Cell C concluded its recapitalisation, enabling MTN SA to adopt the accrual basis of accounting on national roaming revenue (BTS rental remains on the cash basis of accounting),” MTN said.
“The multi-year national roaming agreement with Telkom — which came into effect in November 2021 — continued to scale steadily, with the stronger H2 2022 growth momentum expected to carry over into 2023.”
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