MTN reports strong earnings and ups dividend

MTN Group reported a strong 2022 financial performance, including growing its subscriber base and increasing its dividend, despite a challenging macroeconomic environment of elevated inflation across its 19 markets.

“The structurally higher demand for data and fintech services was sustained, with data traffic and fintech transaction volumes increasing by around a third each,” said MTN CEO Ralph Mupita.

MTN’s return on equity (ROE) rose to 23.4%, and its dividend increased by 10% to 330 cents per share.

In the year to 31 December 2022, total subscribers rose 6% to 289 million, with data subscribers growing by more than 12% to 137 million and Mobile Money users up by 21% to 69 million.

In constant currency terms, the company reported a 15.3% increase in service revenue to R194 billion and maintained a stable margin on earnings of 44%.

EBITDA increased by 14.3% to R90 billion, supported by MTN’s expense efficiency program, which yielded R2.7 billion in savings, mainly in Nigeria and South Africa.

“We invested more than R38 billion in our network, IT, and platform infrastructure – an increase of 17%, while at the same time reducing consumers’ average cost to communicate by nearly 23%,” said Mupita.

The network investment expanded access to broadband services to almost 88% of the population (from 83% in 2021) in the company’s markets as it focused on extending digital inclusion across Africa.

MTN’s contribution to society also included income taxes of approximately R14 billion paid to nation-states in 2022.

The increase in capital investment, expense efficiency, supply chain, network, and financial resilience interventions helped alleviate the impact on results of a challenging operating environment.

This included – across markets – high inflation and interest rates, weak local currencies, pressure on disposable income, and, in South Africa, the significant impact of severe load-shedding.

South African growth limited by load-shedding

The performance of MTN South Africa was solid, with growth in service revenue of 3.6% to almost R41 billion and an EBITDA margin of 39.2%.

Loadshedding impacted EBITDA by R695 million as additional expenditure was incurred to meet the requirements of power, security, and repairs, the latter due to the vandalism of sites.

On South Africa, Mupita said, “amid unprecedented load-shedding and the intensified need for backup power in the second half of 2022, MTN South Africa invested significantly to secure network resilience.”

“South Africa now has a unique opportunity to accelerate efforts to secure the resilience of critical national infrastructure such as telecommunications.

“Government and business must jointly seize this moment and act decisively to deal with the quadruple crises of energy; logistics; crime and corruption; and youth unemployment”, said Mupita. “Inaction risks South Africa being a failed nation-state.”

To drive industry-leading connectivity operations, MTN increased voice, data, and fintech revenue, rolled out more than 5,000km of fibre and invested in subsea cables.