MTN Group announced a strong set of financial results for the third quarter, supported by the performance of its larger operations in South Africa, Nigeria and Ghana, and good group-wide growth in subscriber numbers despite challenging trading conditions which have taken a toll on people everywhere.
“As the COVID-19 pandemic has continued to impact lives and livelihoods across our markets, the group has demonstrated strong operational execution and resilience,” said MTN Group president and chief executive officer Ralph Mupita.
To meet the increase in data and digital usage, he added that MTN had focused its investment on network capacity and resilience and modernising its IT systems, spending R16 billion in the year to the end of the third quarter.
Service revenue grew by 11,4% to more than R43 billion. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 13,9%, and the group EBITDA margin widened by 1,4 percentage points to 43,3%, in line with medium-term targets.
“We recorded solid growth in voice revenue of 3,9%, which reflects an encouraging recovery supported by the easing of lockdown restrictions,” said Mupita. “Data revenue grew by 31,9%, bolstered by increased demand for work-from-home services, digital entertainment as well as online education offerings.”
The group also reported growth of 21,0% in fintech revenue and 37,5% in digital revenue, driven by the increased adoption and usage of digital offerings.
In the quarter, MTN added 12 million subscribers to reach a total of 273 million across 21 markets, as well as adding 5,3 million active data users to 107 million. In our work to enable greater financial inclusion, we reached a significant milestone by surpassing the 40 million MTN Mobile Money (MoMo) user mark, an addition of 3,5 million in the quarter to 41,8 million at end-September.
“Apart from greater adoption brought on by COVID-19, more people used MoMo because of enhancements to the functionality of the MoMo app, the large increase in registered MoMo agents, as well as the integration of MoMo into our instant messaging platform Ayoba in some of our markets,” said Mupita.
MTN South Africa performed particularly well, sustaining its turnaround, with an acceleration in its core consumer and enterprise business units. MTN Nigeria recorded a solid result with some recovery in revenue growth under difficult operating conditions, and MTN Ghana delivered another good performance.
As part of its asset realisation programme, MTN Group completed its exit from its 18,9% investment in e-commerce venture Jumia as well as the localisation of an 8% shareholding in MTN Zambia, realising net proceeds of approximately R2,3 billion and R204 million respectively.
Looking ahead, Mupita said the group remained focused on managing the impacts of the COVID-19 pandemic on its staff, customers, networks and the balance sheet and liquidity profile of the group. Through its Y’ello Hope initiative, it would continue to support those stakeholders who have been particularly hard hit by the pandemic.
“Despite the relaxation of lockdown restrictions, the operating environment remains challenging and uncertain. We will continue to build on our operational and financial resilience. We have now increased our full-year forecast for capital expenditure to R26 billion, to ensure that our networks provide reliable connectivity and digital services to all of our 273 million-and-growing subscriber base,” he said.