Service revenue expanded 9.4% to R80 billion (US44.53bn) and Ebitda increased 10.9% to R42 billion (US$2.38bn) as efficiency initiatives saw its profit margins continue to improve during the first half of the year. MTN’s Ebitda margin improved by 1.2 percentage points to 43.1%.
Basic earnings a share, which include the gain on disposal of the tower associates, increased by 165.4% to 674c, supported by the weaker rand and an overall healthier operational performance, as well as an improved contribution of share of profits from joint ventures and associates.
Reported headline earnings a share increased by 120.5% to 430c, as nonoperational impacts increased the earnings by 46c.
“MTN delivered strong results for the period against the backdrop of difficult trading conditions, exacerbated by the unprecedented socio- and macroeconomic challenges caused by the Covid-19 pandemic,” said MTN Group president and chief executive officer Rob Shuter.
Overall subscribers increased by 10.6 million to 261.5 million during the first six months of the year. By the end of June, MTN had 102-million active data users and 38-million active Mobile Money users.
This brought a further 54-million people into third generation and fourth-generation coverage. The group did not declare an interim dividend owing to uncertainties resulting from the Covid-19 impacts.
“While we expect the remainder of the year to be shaped by the ongoing challenges presented by the pandemic, we believe that MTN will remain comparatively resilient and is poised to sustain its growth over the medium term,” Shuter concluded.
The mobile operator said that as part of its medium-term strategy, it will be leaving the Middle East, starting with the sales of its 75% stake in MTN Syria. Overly reduced revenue from war-torn Syria and the complex nature of the operating environment in the country are part of the reasons MTN is divesting.
Rob Shuter noted during a conference call with reporters, that “the Middle East environment is becoming increasingly complex and it contributes less to the group’s earnings.’’
Shuter disclosed that the disposals in the Middle East region will be done in a phased manner, with its 3 consolidated subsidiaries in Yemen, Afghanistan, and Syria earmarked to be sold first. These markets only contribute about 4% to the group’s earnings before interest, depreciation, taxation, and amortization.
The MTN Group is in advanced talks to sell its stake in MTN Syria to the minority shareholder, TeleInvest, who has 25% stake in the firm, according to the CEO. He believes that the telecoms firm is better served to focus on its Pan-African strategy and simplify its portfolio by leaving the Middle East region in an orderly manner.
In the medium term, the group will also dispose of its 49% stake in MTN Irancell, one of its largest markets. The South African firm plans to exit the entire portfolio in time, which will then leave it with 17 subsidiaries in Africa.