MTN CEO to step down as group rides challenging conditions

Mobile operator MTN on Wednesday (11 March), reported a healthy rise in revenue for the year ended December 2019, despite challenging macroeconomic conditions, particularly in South Africa.

The group also announced that its president and chief executive officer, Rob Shuter, will be stepping down at the end of his contract in March 2021.

The group reported revenue growth of 9.7% to R151.5 billion, with MTN South Africa revenue almost unchanged at R36.43 billion.

Reported headline earnings per share (HEPS) were 468 cents, from 337 cents in December 2018.

Highlights

  • Subscribers increased by 18.2 million to 251 million;
  • Revenue grew by 9.7%;
  • Service revenue grew by 9.8%;
  • IFRS reported EBITDA (before once-off items) increased by 34.3%;
  • Final dividend of 355 cents per share in line with guidance.

“In 2019, the 25th anniversary of MTN Group, we delivered commercial momentum across our operations as well as great progress in our strategy and strong financial results, despite challenging trading conditions,” said Shuter.

“We added 18 million customers to reach a total of 251 million and increased our data users by 17 million to 95 million and our fintech customers by 7 million to 35 million.

“This growth is central to our belief that everyone deserves the benefits of a modern connected life. We also saw improvements in customer experience, network quality and market share across the group.”

In constant currency terms, group service revenue increased by 9.8% to R141.8 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) expanded by 13.6% to R53.4 billion.

The group’s results were supported by double-digit growth in service revenue by both MTN Nigeria and MTN Ghana.

“The performance of MTN South Africa was impacted by economic pressure, new data usage rules and changes in recognition criteria for roaming revenue from Cell C due to delayed payments under the networking roaming agreement,” Shuter said.

MTN South Africa

  • Service revenue increased by 0.4%;
  • Data revenue increased by 5.2%;
  • Fintech revenue increased by 11.2%;
  • Digital revenue decreased by 31.4%.

MTN said that its South Africa operation recorded a stronger performance in the fourth quarter, supporting marginal growth in service revenue for the year despite a difficult operating environment.

MTN South Africa continued to cash account for Cell C revenues in line with IFRS 15. MTN South Africa would have recorded service revenue growth of 1.2% if all Cell C roaming revenue had been recognised, it said.

Service revenue growth was supported by growth in national roaming revenue but this was offset by a 4.1% reduction in consumer prepaid service revenue.

Management succession

MTN announced that the group president and CEO Rob Shuter will be stepping down from his role at the end of his contract in March 2021.

The succession process will be concluded during the year, “enabling a seamless handover”, it said.

MTN group chief technology and IT officer Charles Molapisi has been appointed to the group executive committee and the fixed contract of the group chief operations officer, Jens Schulte-Bockum, has been extended until 31 March 2022.

Looking ahead, Shuter said: “We are well-positioned for growth. Guided by our well-defined BRIGHT strategy, we are building our growth strategy on our digital operator model while optimising efficiencies, capex and cashflow.

“Following data price reductions in South Africa and Nigeria in 2019, we expect price elasticity to improve data revenue growth in 2020, supported by expanded 4G coverage in Nigeria and across the group.”

“We will continue to scale up our fintech and digital services as well as grow our enterprise and wholesale businesses.”

Share Price

Shares in MTN dropped 15% on Monday (9 March) as a result of a sharp fall in global oil prices, which impacted its biggest market, Nigeria – Africa’s biggest oil producer.


Read: MTN Nigeria reports strong data growth

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MTN CEO to step down as group rides challenging conditions