MTN continues to feel load shedding pain

 ·14 Aug 2023

Despite seeing a rise in profits in the first half of the year, MTN says load shedding is having a disastrous impact on its operations.

MTN CEO Ralph Mupita said that load shedding had a detrimental effect on the group’s operations for the first half of the year, despite it easing slightly in Q2 compared to Q1.

Mupita said that the group experienced 181 days of load shedding in H1 2023 compared to just 68 days in H1 2022.

“We focused on executing our network resilience programme and are pleased with the improvements in network availability and NPS during the period. We are tracking slightly ahead of plan in our resilience rollout, which has been reflected in the encouraging uplift in traffic trends and service revenue in Q2 versus Q1,” he said.

He also noted that there were major structural reforms following the inauguration of President Tinubuk, with the government removing its fuel subsidy and the Central Bank of Nigeria introducing an effective free float of the naira in the Nigerian Foreign Exchange Market.

He said that these reforms should bring a boost to the Nigerian economy and support the investment case for MTN Nigeria in the medium to longer term.


He added that the business continued to grow in a difficult trading environment, with data traffic and fintech transaction volumes up by 18.5% (up 35.0% excluding JVs) and 37.3%, respectively.

“This supports our medium-term growth thesis, enabled by ongoing investment in our networks and platforms. In H1, we deployed R17.2 billion of capex, reflecting a capex intensity of 15.2% – within our medium-term target range of 15-18%,” Mupita said.

The group’s overall service revenue growth increased from 14.8% in H1 2022 to 15.1% in H1 2023.

The group’s EBITDA increased by 13.5% as elevated inflation and foreign exchange depreciation contained to place pressure on costs – particularly the short-term burden put on consumers due to the Nigerian reforms.

“These impacts were partially mitigated through the ongoing progress of our expense efficiency programme, which achieved sustainable cost savings of R702 million in the period,” Mupita said.

The group also its subscriber base increased by 3.6% to 291.7 million, but it admitted that subscriber registration regulations in some markets, including Ghana, and the conflicts in Sudan impacted overall growth.,

Active data subscribers also grew by 7.4% to 139.5 million, which led to an increase in traffic and data revenue growth of 23.6%.

Despite being affected by the group’s cash shortages in Q1, the shift in priority to wallet customers in Nigeria and the clean-up of the group’s user base in Côte d’Ivoire, the group’s fintech service revenue grew by 21.7%.

Overall Basic Earnings Per Share increased by 14.8% to 511 cents (H1 2022: 445 cents), whilst Reported headline earnings per share (HEPS) increased by 7.1% to 542 cents (H1 2022 restated: 506 cents).

Although the group saw a rise in profits, it has not declared an interim dividend which aligns with its policy.

However, the group’s board of directors predicts that it will pay a minimum ordinary final dividend of 330 cents per share for FY 2023.

Below are some of the group’s key financials:


The group added that as part of its strategy to introduce strategic minority investors into the MTN Group Fintech business, it has entered into commercial agreements with Mastercard to grow the group’s fintech business.

Mastercard will provide a minority investment for the business on a cash and debt-free basis. MTN values its fintech business at R100 billion.

That said, the group is still expecting a difficult rest of the year.

“We anticipate a continued recovery in MTN SA’s performance in H2; although elevated inflation and forex volatility in our key markets – especially Nigeria – will likely place increased pressure on EBITDA margins and earnings into H2,” Mupita said.

“We have progressed our work to accelerate expense efficiencies and have identified R7 billion-R8 billion in additional efficiencies to be pursued over three years, from 2024 onwards. This is over and above the R1.5 billion we target for FY 2023.”

“The weakening of currencies in our markets against the US dollar is also impacting capex, for which guidance for 2023 is revised up to R40.1 billion, based on current currency assumptions and driven mostly by maintaining the investment in 4G and 5G rollout in Nigeria.”

Read: Best call quality in South Africa: MTN vs Vodacom vs Cell C vs Telkom

Show comments
Subscribe to our daily newsletter