Announces Plans To Exit Middle East
MTN Group reported service revenue growth of 9.4 per cent to ZAR 80 billion(US$456.30million) in the first six months to 30 June, and EBITDA up 10.9 per cent year-on-year to ZAR 42 billion, as efficiency initiatives drove improvement in margins. The South Africa-based mobile operator also said it plans to exit the Middle East over the medium term to focus on Africa and is in advanced talks to sell its majority stake in MTN Syria.
Headline earnings per share after non-operational impacts grew by 54 percent, operating free cash flow increased by 117.8 percent and ROE improved further to 14.1 percent. MTN added 11 million subscribers to reach 262 million, with 102 million active data users and 38 million active mobile money users.
Despite lockdown restrictions affecting network roll-out, MTN Group invested ZAR 10 billion in capital expenditure throughout its markets and brought another 54 million people under 3G and 4G coverage. The focus on data affordability reduced the average rate per megabyte by 34 per cent. The group also made progress in its asset realisation programme, concluding the disposal of the tower company investments in Ghana and Uganda for ZAR 8.8 billion.
MTN did not declare an interim dividend given the continued uncertain impact of Covid-19 on the operating environment but said it would consider a final dividend should conditions warrant it. The group said the results were encouraging as it navigated well through the economic crisis brought on by COVID-19.
MTN Group CEO Rob Shuter said the company has prioritised looking after its people, customers and networks while focusing on efficiencies, adding that work-from-home programmes continue for MTN staff, Y’ello Hope Packages are helping ease customers financial pressures, and MTN is supporting other initiatives to limit the effect of COVID-19 on society.
MTN also announced it was focusing its strategy in future on the African markets and that it believes the group is best served to focus in the future on the pan-African strategy.
According to Shuter, MTN will therefore be exiting the Middle East in an orderly manner over the medium term. As a first step, he said, it is in advanced discussions to sell MTN’s 75 per cent stake in MTN Syria.
