MTN cheers strong data and fintech adoption, delivers dividend

MTN Group reported strong financial results for the year ended December 2021 ‘in a tough macro environment’ growing service revenue by 18.3% to R171.8 billion, led by growth of 6.5% in MTN SA.

Group revenue in its connectivity business was as follows: voice grew by 5.2% to R82.4 billion, and data expanded by 36.5% to R56.5 billion. Fintech grew by 30.9% to R15.9 billion, digital was up by 22.8% to R3.3 billion, enterprise revenue grew by 13.4% to R16.6 billion and wholesale increased by 49.7% to R6.0 billion.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 23.7% to R80.8 billion; and the EBITDA margin expanded by 2.2 percentage points to 44.5%.

Headline earnings per share was up 31.8% to 987 cents per share, while the board declared a final dividend of 300 cents per share.

“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, adding that headline earnings per share adjusted for non-operational items increased by 26.6%; return on equity expanded by 2.6 percentage points to 19.6%; and organic operating cashflow accelerated by 35.2% to R38.3 billion.

The results were delivered despite a slowdown in subscriber additions related to industry-wide regulations in Nigeria. At year-end, MTN Group had a total of 272.4 million subscribers, up 2.9 million from end-2020 – excluding Nigeria, subscribers were up 11 million.

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 totals of 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,” said Mupita.

MTN said it connected 23 million additional people to broadband and achieved rural broadband coverage of 83% against a target of 95% by 2025.

MTN South Africa

  • Service revenue increased by 6.5%
  • Data revenue increased by 13.1%
  • Fintech revenue increased by 3.5%
  • Digital revenue increased by 19.9%
  • EBITDA increased by 6.8%
  • EBITDA margin decreased by 0.1pp to 38.9%

MTN said its strong performance in South Africa was achieved in a challenging macroeconomic and consumer backdrop and increasing unemployment rates in industries such as hospitality and tourism. MTN SA was also impacted by shifts in customer spending patterns as lockdown restrictions abated and the movement of people increased.

“This intensified the competition for share of the consumer’s wallet,” it said.

The number of subscribers increased by 3.0 million to 35 million as churn stabilised and MTN SA recorded higher gross additions. The postpaid subscriber base recovered well, aided by data value offers and advanced CVM churn management, with a 456,000 increase in subscribers to 7.4 million.

MTN SA said it added 2.4 million prepaid subscribers to close the year at 27.6 million, supported by an increase in 4G customers.

Data consumption accelerated in 2021, with data traffic growth of 58.3% and a 12.5% increase in the number of customers actively using the internet. As at 31 December 2021, MTN SA had 17.7 million active data users. This drove a 12.2% increase in overall mobile data revenue.

The operator said that an active prepaid data subscriber now consumes an average of 2.3GB of data a month and an active postpaid data subscriber uses nearly 10.3GB per month.

The consumer postpaid business remained resilient in the year with service revenue growth of 4.5%. The consumer prepaid business’s performance was supported by strong data revenue, however, there was offset by pressure from voice substitution, challenging macroeconomic conditions and increased split of consumer wallet share. Service revenue increased by 2.1%, slowing in the fourth quarter.

The enterprise business delivered a 16.8% increase in service revenue. The business recorded growth for nine consecutive quarters supported by the expansion of the core mobile business as MTN SA gained market share. Growth was driven through fixed data deals, strengthening of the SME CVM initiatives and the sustained recovery of the ICT business.

Wholesale revenue increased by 21.7%, supported by the national roaming deal with Cell C and solid growth in the MVNO portfolio. Revenue recognition remains on a cash basis as Cell C works towards its recapitalisation. MTN SA recognised R2.7 billion (up 33.9% YoY) in national roaming revenue from Cell C and a balance of R236 million remained unrecognised, as of 31 December 2021.

MTN SA said it continues to invest in the expansion of its network capacity to further enable infrastructure sharing. During the year MTN SA concluded a new multi-year national roaming agreement with Telkom which came into effect on 1 November 2021. MTN SA will provide 2G, 3G and 4G services to Telkom.

MTN said its MVNO business continues to grow. At the end of 2021, there were over 550k active customers, from MVNO partners connected to the MTN network.

The fintech business launched in February 2020 continued to grow, with 4.2 million registered MoMo users and 602,000 MAU on 31 December 2021.

Read: MTN is on a major hiring drive – here’s what they are looking for

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MTN cheers strong data and fintech adoption, delivers dividend