MTN Group has reported a 0.1 percent increase in revenue to ZAR 147.1 billion in 2015 from ZAR 146.9 billion in 2014. Revenue remained flat largely because of a decline in voice revenue in Nigeria and a reduction in handset revenue in South Africa after industrial action in the first half of the year that led to lower device sales. This was largely offset by an increase in data revenue across the business, though. The total subscriber base increased by 4.1 percent to 232.5 million.
Operating profit fell to ZAR 35.3 billion from ZAR 49.6 billion in 2014, and net profit dropped to ZAR 20.2 billion from ZAR 32.1 billion. EBITDA decreased 19.2 percent to ZAR 59.1 billion. This includes the impairment for handsets in South Africa (ZAR 592 million) and the interconnect debt provision in Nigeria (ZAR 503 million). The company also took a provision for the Nigeria regulatory fine (ZAR 9.287 billion), which was offset by the profit from the sale of towers (ZAR 8.263 billion) and an adjustment for hyperinflation (ZAR 231 million) in Iran, Syria and Sudan. In addition, 2014 EBITDA was higher as a result of the BICS five-year profit amortisation, which ended in 2014 (ZAR 364 million) and a provision made relating to the build-operate-transfer licence in Syria, which was reversed in 2014 (ZAR 497 million). Excluding these impacts, EBITDA reduced by 8.6 percent to ZAR 59.92 billion.
MTN's basic headline earnings per share (HEPS) declined by 51.4 percent to ZAR 7.46, largely due the Nigerian regulatory fine provision which had a ZAR 4.02 negative impact on HEPS. The group has declared a second-half dividend of ZAR 8.30, which will bring the total dividend for the 2015 full year to ZAR 13.10. This represents year-on-year growth of 5.2 percent. For 2016, the company anticipates declaring a minimum dividend of ZAR 7.00, which takes into consideration the uncertainty regarding the regulatory fine imposed by the Nigeria Communications Commission (NCC) and the dollar liquidity situation in Nigeria.
Capital expenditure (capex) increased by 15.7 percent to ZAR 29.19 billion in 2015, with a key focus on 3G and LTE roll-out. The group also deployed 1,469 km of long-distance fibre and connected a total of 1,164 sites to fibre, enabling better quality data networks across its operations. For 2016, MTN forecast a small increase in capex to ZAR 30.81 billion, including a more than doubling in Nigeria to over ZAR 11 billion.
MTN said the current economic challenges in Nigeria have resulted in increased pressure on US dollar liquidity and it expects this situation to remain a challenge in the short to medium term. The group said it is establishing contingency plans to ensure it can continue with its network roll-out plans. The operator targets a pick-up in Nigerian subscriber growth this year, forecasting net additions of 4 million versus 1.4 million last year, while its other large markets, South Africa and Iran, will see slower growth. In total, MTN expects net additions across the group of 12.5 million this year, versus 9 million in 2015.
MTN also announced that its search for a new CEO is "well underway" and it aims to make an announcement in early Q2.
