MTN on Wednesday (5 August), reported a decline in revenue both locally, and at a group level, for the six months ended June 215, citing a challenging operating environment and
\nlower than expected performance in parts of the business.<\/p>\n
MTN South Africa’s performance was hampered by handset supply chain challenges and industrial strike action during the period, it said.<\/p>\n
The strike took place between 20 May 2015 and 16 July 2015.<\/p>\n
“Despite this, the operation continued to show encouraging growth in service revenue, driven mainly by data revenue,” MTN said.<\/p>\n
MTN South Africa reported a 1.4% decline in revenue to R18.9 billion, due to a 27.5% reduction in handset revenue, “although management expects this to improve in the second half supported by the changes in the logistics process'”.<\/p>\n
The operation increased its subscriber base by 1.8% to 28.5 million.<\/p>\n
The number of smartphones on MTN’s network increased by 9.1% to 5.8 million, and the number of data users increased by 18.1% to 17.3 million. Growth in smartphones
\nand data users was constrained by low handset availability.<\/p>\n
Group revenue declined by 4.9% to R69 billion. Movements in the majority of the group’s
\noperational currencies against the rand negatively impacted performance, MTN said.<\/p>\n
Group operating profit slipped to R19.9 billion, from R22.9 billion before, while headline earnings per share decreased 10.3% to 654 cents.<\/p>\n
EBITDA decreased by 10.1% to R30 billion, it said.<\/p>\n
MTN said it remains well positioned in a rapidly evolving market, growing its subscriber base by 3.4% to 231,0 million.<\/p>\n
Dividends declared at the board meeting held on 4 August 2015 amounted to 480 cents per share.<\/p>\n
Capital expenditure (capex) was R10.85 billion, 18% higher than the previous period, the operator said.<\/p>\n
MTN said it continued to focus on improving network quality, increasing capacity and expanding the footprint of our 3G, LTE and fibre networks.<\/p>\n
During the period, the group’s operations rolled out 1,335 2G, 5,048 largely co-located 3G and 2,475 LTE sites as well as 722km of long distance fibre.<\/p>\n
Looking ahead, MTN said it would focus on building staff engagement and improving customer service in the South African operation in the second half of the year, following a prolonged strike.<\/p>\n
The operation will also accelerate its capex plans to support medium term growth prospects, particularly in the data area. Corrective measures have been implemented to improve handset sales, MTN said.<\/p>\n
MTN expects earnings drop<\/a><\/strong><\/p>\n