MTN Group reported a 4.9 percent decrease in revenues for the first half to ZAR 69.2 billion, hurt by negative currency effects. The rand strengthened by 8.7 percent against the Nigerian naira, 23.1 percent against the Ghanaian cedi, 10.6 percent against the Central African Franc, 5.8 percent against the Ugandan shilling, 36.9 percent against the Syrian pound and weakened 5.7 percent against the Sudanese pound. On an organic basis, revenues fell 1.4 percent in South Africa and 1.1 percent in Nigeria, its two largest markets, while group revenue at constant currency rates increased 0.7 percent.
Despite the negative currency effects and difficult market conditions, the group continued to benefit from increased demand for data services, growing data revenue by 21.3 percent. This followed an 87 percent annual increase in data traffic as well as encouraging growth in digital and mobile financial services, MTN said. The total customer base also grew by 3.4 percent year-on-year to 231.0 million at the end of June.
EBITDA decreased 10.1 percent to ZAR 30.3 billion, and the EBITDA margin declined by 2.6 percentage points to 43.7 percent, mainly as a result of lower revenue and weaker local currencies impacting costs. The sale and lease back of towers, which were largely earnings neutral due to lower depreciation costs, were also a drag on the EBITDA margin. However, good progress in transforming the operating model, maintaining cost growth below inflation and optimising resources partly offset the decline in margin. Capital expenditure rose 18.0 percent from a year earlier to ZAR 10.9 billion. During the period, MTN added 1,335 2G sites, 5,048 (largely co-located) 3G sites, 2,475 LTE sites and 722km of long-distance fibre.
Operating cash flow was down by 12.6 percent year-on-year to ZAR 26.3 billion, and headline earnings decreased 10.3 percent to ZAR 6.54, in line with the mobile operator's earlier trading update. The group declared an interim dividend of ZAR 4.80 per share. MTN said the results reflect a challenging operating environment and lower-than-expected performance in parts of the business. A difficult regulatory environment and weak macro-economic conditions continue to impact the group's performance. It will focus on service improvements in South Africa and expects the challenging market conditions to continue in Nigeria in H2, while other markets should continue to show growth. MTN lowered its subscriber net addition forecast for the full year slightly, to 16.75 million from an estimate in March of 17.50 million.
