Telecommunications firm MTN Group reported strong financial results for the year ended December 31, 2021, as it executes its revamped Ambition 2025 strategy.

The group’s service revenue grew by 1%, or 18.3% in constant currency, to R171.8-billion; earnings before interest, tax, depreciation and amortisation (Ebitda) increased 5.3%, or 23.7% in constant currency, to R80.8-billion; and its Ebitda margin improved 1.7 percentage points to 44.5%.

“The performance was underpinned by pleasing growth in our larger operating companies, operating leverage and the benefits of our expense efficiency programme,” said MTN Group president and CEO Ralph Mupita.

Reported headline earnings per share (HEPS) increased 31.8% to 987c, with non-operational impacts decreasing HEPS by 123c.

“We thus continued to show pleasing momentum in the growth of underlying earnings at the bottom line; adjusting for one-off items, HEPS was up 26.6% to 1 110c,” he added.

Basic earnings per share (EPS) decreased by 19.3% to 763c, impacted by impairment losses of 64c relating mainly to MTN Yemen and derecognition losses relating to MTN Syria of about 262c.

All of MTN South Africa’s business units achieved healthy growth, while both MTN Nigeria and MTN Ghana each delivered service revenue of more than 20% on a constant currency basis.

On a reported basis, MTN’s growth in group service revenue was supported by growth across most of its operations, with MTN South Africa service revenue up 6.5% to R39.45-billion, MTN Nigeria up 3.9% to R59.94-billion, MTN Uganda up 2.4% to R8.47-billion, MTN Ghana up 11.7% to R19.13-billion, MTN Cote d’Ivoire up 1.5% to R8.86-billion and MTN Cameroon up 8.5% to R7.21-billion.

MTN’s group data revenue increased 16% to R56.5-billion, while group fintech revenue was up by 17.4% R15.9-billion.

“The group’s strong results were delivered despite the reduction in subscriber additions related to industry-wide regulations in Nigeria, including a ban on new SIM activations in the first half of the year,” Mupita commented.

“We closed the year with 272.4-million subscribers, up by 2.9-million. Excluding Nigeria, group subscribers increased by 11-million. Encouragingly, subscriber additions in Nigeria returned to a positive trajectory in the fourth quarter, adding about one-million customers – this establishes a solid basis for growth going forward.”

The greater adoption of data and fintech services resulted in the addition of 11.1-million new data users and 10.4-million new Mobile Money users to reach 122-million and 56.8-million respectively.

“To cater for the 53.3% expansion in data traffic and 41.1% increase in fintech volumes, we continued to invest in the capacity and resilience of our networks and platforms, deploying total capex of R32.7-billion in the year,” Mupita said.

MTN deployed 3 566 third-generation, 9 158 fourth-generation and 849 fifth-generation sites during the year under review.

“Capital expenditure intensity edged up to 18% from 16% under IAS 17 in December 2020, as we continued to invest in the accelerated growth opportunities we have identified.”

Meanwhile, group operating free cash flow increased by 13.2% to R32.1-billion, while the company’s return on equity, adjusted for non-operational items, including hyperinflation, expanded 2.6 percentage points to 19.6%.

“We deleveraged the balance sheet, paying $1.4-billion in dollar debt and improving the holding company leverage to 1.0x from 2.2x. This was boosted by cash of R18.4-billion repatriated from our operating companies and R4.1-billion in proceeds from our asset realisation programme during the 2021 financial year,” he said, adding that further net proceeds of R8.8-billion are expected from the public offer of MTN Nigeria shares and the sale of passive tower infrastructure, once completed.

MTN declared a final dividend of 300c a share for the year ended December 31, 2021.