MTN Group Displays Strong Operational Performance in 2023

87

MTN Group demonstrated commendable resilience in its operational performance throughout 2023 despite encountering formidable macroeconomic challenges. The company announced a total dividend of 330 cents per share. Persistently high inflation in several crucial markets, coupled with the significant devaluation of the Nigerian naira, exerted pressure on reported results for both MTN Nigeria and MTN Group.

Despite these challenges, MTN Group witnessed robust demand for data and fintech services, leading to a noteworthy increase in active data subscribers by over 9%, totaling 150 million, and active Mobile Money (MoMo) users by 5%, reaching 72.5 million. The overall subscriber base expanded to 295 million across MTN Group’s markets.

Data traffic on MTN’s networks experienced substantial growth, exceeding a third, with average usage per user climbing to more than 6GB per month. To sustain this growth and enhance network coverage and quality, MTN allocated a capital expenditure (excluding leases) of R41 billion during the year.

The volume of fintech transactions surged by approximately a third to 17.6 billion, with the total value of transactions across the fintech platform soaring to US$272 billion. This growth was primarily driven by the expansion of advanced services in payments, bank tech, and remittance solutions.

Despite facing challenges such as load shedding in South Africa, MTN South Africa invested R10 billion in capital expenditure to bolster network capacity expansion and power resilience. A significant portion of this investment, amounting to over R2.6 billion, was dedicated to enhancing power and security resilience. By the year’s end, network availability across the entire network reached approximately 95%, with sites that underwent resilience investment recording network availability of over 98%.

MTN South Africa reported robust growth in consumer postpaid, enterprise, and wholesale segments, with sequential improvements observed in the consumer prepaid business during the latter half of the year.

Strategically, MTN Group made significant advancements in its fintech and fiber businesses. Notably, the company secured an agreement with payment network processor Mastercard, which committed to investing up to US$200 million for a minority stake in MTN Group Fintech, valuing it at US$5.2 billion. This partnership is expected to accelerate the growth of MTN’s fintech business.

Additionally, MTN Group progressed in structurally separating its fiber business, Bayobab, with efforts to secure regulatory clearances in key markets. Collaborating with Africa50, Bayobab embarked on Project East2West, a terrestrial fiber optic cable network aimed at enhancing broadband access, particularly for Africa’s landlocked countries.

The Group achieved a noteworthy 13.1% absolute reduction in Scope 1 and 2 emissions as part of its environmental commitment to achieve Net Zero emissions by 2040. Furthermore, the sale of MTN Afghanistan concluded the Group’s exit from consolidated subsidiaries in the Middle East.

Despite the challenging external environment characterized by elevated inflation, forex volatility, and political tensions, MTN Group’s financial performance remained resilient. In constant currency terms, service revenue grew by 13.5% to R210 billion, with data revenue accounting for R84 billion, and voice revenue contributing R83 billion. Fintech revenue totaled R21 billion.

Earnings before interest, tax, depreciation, and amortization (EBITDA) increased by nearly 10% in constant currency to R90 billion. The Group achieved expense efficiencies of R2.6 billion and maintained key debt ratios within covenant levels.