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Financial|Service
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financial|service

MTN posts significantly higher FY18 earnings

7th March 2019

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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JSE-listed telecommunications giant MTN on Thursday posted an 85.2% increase in its reported headline earnings per share (HEPS), from 182c in 2017 to 337c during the year ended December 31, 2018.

While a significant jump on the prior year, HEPS could have reached 565c apiece; however MTN had to adjust for 36c relating to the Nigeria fine interest; hyperinflation of 45c; a 71c impact from foreign exchange losses; the 43c impact of forex losses related to MTN Irancell of 43c; and the Central Bank of Nigeria (CBN) resolution payment of 33c.

HEPS has been further negatively impacted by a year-on-year swing of 76c in the contribution from associates and joint ventures.

"MTN delivered a very encouraging performance in 2018, meeting our targets for growth in service revenue and earnings before interest, tax, depreciation and amortisation (Ebitda), as well as those on reducing capital expenditure (capex) intensity and improving holdco leverage. The group has now delivered eight quarters of continued operational improvements,” said MTN group president and CEO Rob Shuter.

The Ebitda margin increased 1.7 percentage points to 35.9% during the 2018 financial year.

“This was largely driven by the improvement in margins in South Africa (+0,7pp) and Nigeria (+4.5pp excluding the CBN resolution payment). Over the medium term, we will target improved Ebitda margins,” he said.

“The profit on the sale of MTN Cyprus and gains on the dilution of our investments in Iran Internet Group and Jumia Technologies further supported the reported Ebitda margin.”

MTN’s service revenue also increased against its medium-term target of upper-single-digit growth, with the increase of 10.7% in group service revenue to R125.4-billion, led by a 17.2% increase in MTN Nigeria, 23% from MTN Ghana and 4.2% from MTN South Africa.

Voice and data revenues continued to expand robustly.

“In 2018, voice revenue increased by 7.3%. This was underpinned by subscriber growth of 16-million customers, our targeted customer value management efforts, as well as the continued shift in Nigeria to voice as we optimised our value-added service (VAS) offerings,” Shuter noted.

At December 31, 2018, the group had 233-million subscribers.

The group’s data revenue increased 22%, supported by improved coverage, growth in the subscriber base, increasing handset penetration and the elasticity effects of lower data prices.

Meanwhile, digital revenue decreased by 32.9% as a result of the ongoing VAS optimisation.

Fintech revenue surged 46.8% to R7.8-billion, while active MoMo users increased to 27-million subscribers across 14 markets.

MTN declared a year-end final dividend of 500c a share.

Edited by Creamer Media Reporter

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