MTN has reported a big drop in earnings for the six months ended June 2016, which it says is primarily down to its operations in Nigeria.<\/p>\n
The company has also shed customers in its South African operation, as it ‘continued to operate in a challenging environment’.<\/p>\n
MTN said it has made strides towards resolving these challenges although many of these factors fall outside of its control.<\/p>\n
On 10 June MTN Nigeria resolved its issues with the Federal Government of Nigeria (FGN) and agreed to pay the FGN a total cash amount of 330 billion Nigerian naira $1.671 billion, using the exchange rate prevailing at the time) over three years in a full and final settlement.<\/p>\n
Apart from the Nigerian regulatory fine, MTN said that the depreciation of local currencies against the US dollar had a substantial impact on the Group\u2019s results. This resulted in foreign exchange losses amounting to R3.606 billion during the period.<\/p>\n
Financial results snapshot for the six months ended 30 June 2016:<\/p>\n
– Group subscribers remained flat at 232.6 million from 31 December 2015
\n– Revenue increased by 14.0% to R78.88 billion
\n– Data revenue increased by 32.2% to R19.85 billion
\n– Voice traffic and data traffic increased by 7.9% and 135.3% respectively
\n– EBITDA decreased by 3.3% to R29.273 billion
\n– Headline loss per share of 271 cents
\n– Interim dividend of 250 cents per share
\n– Nigeria regulatory fine re-measurement impact of R10.5 billion<\/p>\n
MTN South Africa reported a lower-than-expected performance, negatively impacted by network outages in some areas, competition and economic pressure impacting consumer spending.<\/p>\n
The result was supported by good growth in data usage benefiting from aggressive smartphone device sales and continued efforts to improve 3G and LTE network quality.<\/p>\n
The operation\u2019s subscriber base declined 2.6% to 29.8 million. The pre-paid and post-paid segments declined by 2.7% to 24.7 million and 2.1% to 5.1 million, respectively, MTN said.<\/p>\n
Total revenue increased by 5.1% to R19.84 billion mainly as a result of higher data and device revenue growth. This was partly offset by a 6.1% decline in outgoing voice revenue.<\/p>\n
Service revenue, which excludes device revenue, remained relatively flat. Data revenue increased by 19.2%, contributing 34.1% to total revenue.<\/p>\n
The number of smartphones on the network increased by 18.4% to 9.3 million while megabytes per user increased 53.8% for the period.<\/p>\n
Capex for the six months amounted to R4.77 billion with the rollout of 369 co-located 3G sites and 284 LTE sites.<\/p>\n
The operation continued to improve quality and capacity of the network in key cities to cater for increased data traffic. In addition, 175 sites were connected to fibre.<\/p>\n
“Fibre to the home connections remain a priority with approximately 10,000 homes passed, of which 40% were rolled out during the period,” MTN said.<\/p>\n
This is why MTN is making a loss in the first half of 2016<\/strong><\/a><\/p>\n MTN reveals when it plans to list in Nigeria<\/a><\/strong><\/p>\n