MTN Group revenue for 2016 was little changed at ZAR 146.89 billion compared with ZAR 146.35 billion in 2015. Revenue growth was hit by the depreciation of the rand and naira against the US dollar, particularly in the second half of 2016. On an organic basis, revenue rose 2.9 percent, led by 7.9 percent growth in south and east Africa and a 3.8 percent increase in the MENA region. This was offset by a 0.3 percent fall in west and central Africa, which is the biggest contributor at 55 percent of revenues.
Group subscribers increased by 3.3 percent to 240.4 million at 31 December 2016. MTN said it expects net subscriber additions to improve to 8.29 million in 2017 from 7.88 million last year, thanks largely to improving results in west Africa.
MTN's pre-tax profit fell to ZAR 18.21 billion from ZAR 36.58 billion in 2015. The group reported a basic headline loss per share of ZAR 0.77, largely caused by the Nigerian regulatory fine. Excluding this impact in both years, HEPS declined 63.2 percent to ZAR 4.23. The attributable loss per share was ZAR 1.44, versus EPS of ZAR 1.11 in the prior year.
Group EBITDA decreased by 13.2 percent to ZAR 51.98 billion from ZAR 59.92 billion in 2015, after a nearly 10 percent increase in adjusted operating costs, while EBITDA on an organic basis declined 18.5 percent. Costs were impacted by more site roll-outs and tower leasing costs in Nigeria and higher device sales in South Africa, as well as general increases in interconnect, roaming, staff and SG&A costs.
Cash inflows from operations decreased by 3.3 percent to ZAR 55.68 billion. This was mainly as a result of the Nigeria payment towards the regulatory fine of ZAR 5.87 billion, which was offset by an increase in working capital movements. Cash flows were also affected by dividend payments of ZAR 19.79 billion to equity holders, dividend payments of ZAR 1.18 billion to minorities and tax payments of ZAR 11.70 billion.
MTN said it repatriated ZAR 6.308 billion (EUR 425 million) from Iran last year and another EUR 468 million was received from the start of this year for outstanding dividends of the last five years. Another EUR 135 million in loans is due for repayment in September, which should largely complete the outstanding payments from MTN Irancell. MTN said payments should normalise going forward after the easing of sanctions against Iran.
Group cash capex rose to ZAR 35.25 billion in 2016 and included the purchase of a 4G licence and spectrum in Ghana (ZAR 973 million), LTE and fibre licences in Congo-Brazzaville (ZAR 266 million) and a Nigerian spectrum licence (ZAR 1.39 billion).
MTN Group’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, with a number of material regulatory, macro-economic and political challenges in its regions. Despite these difficulties, the business began to show encouraging first signs of a turnaround, the group said. The Ignite restructuring programme launched at the end of 2016 will impact results in its two biggest markets, Nigeria and South Africa, already from this year.
The company declared a second-half dividend of ZAR 4.50 per share, which will bring the total dividend for 2016 to ZAR 7.00. MTN said it aims to pay the same amount in 2017, although warned that there remains considerable uncertainty about the regulatory environment and dollar liquidity in its markets.
