MTN Returns to Profit in H1 2017

MTN Group posted a profit for the six months to the end of June, confirming its earlier forecast that it would reverse its negative performance in what was a somewhat turbulent 2016 and saying it is on track to meet guidance for 2017 as a whole. (See MTN Predicts Return to Profit for H1 2017 .)

The pan-African group, which made no bones about the fact that it continues to face challenging macro-economic conditions across a number of its markets, including Nigeria and South Africa, said headline earnings were 217 US dollar cents per share in the first half of 2017 compared with a loss of 271 cents per share a year earlier.

As previously reported by Connecting Africa, MTN's results in 2016 were heavily impacted by the excessive fine levied by Nigerian authorities in late 2015 - a payment of NGN330 billion ($903 million) was eventually agreed. (See Making MTN Great Again.)

First-half group revenue in constant currency improved 6.7% to ZAR64.32 billion ($4.8 billion), although revenue was 18.5% lower if currency effects were taken into account. Also on a constant currency basis, EBITDA fell by 3.1% to ZAR21.18 billion.

MTN Group Ltd.  said the improvement in group revenue was mostly attributable to strong growth in data and digital revenue, with data revenue increasing by 31.9% to ZAR13.95 billion. Digital revenue increased by 24.7%, driven mainly by mobile financial services, with the group adding 2.7 million active MTN Mobile Money customers in the first half of the year. It said it now has 18 million active mobile money subscribers in total.

Total group subscriber numbers fell 3.6% to 231.8 million, which MTN blamed on a decline in subscriber numbers at MTN Nigeria and MTN Ghana. This was largely a result of the group's initiative to modernize subscriber definitions to reflect the business's changing mix of revenue streams, it said.

MTN also noted that capex was lower than expected, affected by limited foreign currency availability in Nigeria, some execution challenges as well as the seasonality of the capex cycle. In the period, a total of 4,404 3G and 3,478 4G sites were rolled out, with total capex amounting to ZAR10.31 billion by the end of June. The group plans to accelerate capex in the second half of the year, to an estimated ZAR30 billion in the year as a whole.

MTN also now has a new management team in place including a new CEO in the form of Rob Shuter, who started on March 13.(See MTN's South Africa CEO Jumps Ship, Africa's MTN Appoints Vodafone's Shuter as CEO and MTN Ignites Digital Transformation With Executive Appointments.)

Shuter described the latest progress in the "key growth drivers of data and digital services" as pleasing, "against headwinds of challenging macro-economic conditions and foreign exchange currency pressures."

He said that in the second half of the year MTN would aim to "complete our network investment programme and build medium-term financial KPIs."