July 13, 2024

MTN’s revenue up 11.1% in constant currency in Q1 amid COVID-19 crisis

MTN group president and CEO Rob Shuter
MTN group president and CEO Rob Shuter

MTN Group on Thursday announced a positive service revenue trajectory in the first quarter financial results for the year ended March 31, 2020.

“The effects of the COVID-19 pandemic on the global economy have brought about unprecedented uncertainty, volatility and challenges which are impacting our markets at both the socio-economic and macro-economic levels. The impact of the pandemic on our quarter one performance was not significant as lockdown restrictions for our consolidated subsidiaries were only implemented from the last week of March 2020,” said MTN Group president and CEO, Rob Shuter.

Shuter said MTN continued to build commercial momentum adding 6,6 million subscribers in the quarter, with active data users increasing by 2,9 million and MoMo subscribers by 0,4 million.

“We continued to scale our Ayoba platform recording 2,6 million monthly active users. We accelerated our MoMo agency network in Nigeria, under our super-agent licence, adding 70 000 agents in the first quarter, bringing the total number of registered agents to 178 000.

“On strategic progress, the digital business returned to growth, booking 15.6% in the quarter. In MTN SA the enterprise business recorded its second quarter of growth and in May we commenced phase 2 of the national roaming agreement with Cell C and look forward to a continued partnership.

“In these difficult times we continue to focus on our key priorities: looking after our people, our customers and our networks while we focus on efficiencies. For our people, the immediate priority is their health and safety, where the work-from-home programmes across our markets empower our staff to work remotely while ensuring continuity in our operations. For our customers, we have ramped up our digital channels as a service alternative, to enable them to continue purchasing airtime and accessing our products and services seamlessly as well as launching Y’ello Hope Packages in most of our markets.

“Our various initiatives support governments across our markets with communication systems and connectivity as we do our part to help minimise the economic and social impact.

“The COVID-19 situation is an evolving one and will undoubtedly impact the year ahead. Given the uncertainties associated with the duration and economic impact of the pandemic, it is difficult to reliably quantify the direct and indirect financial impacts on the business at this early stage. The group will continue to focus on business continuity and efficiency, and we have implemented strict measures to preserve resources and strengthen our resilience, Shuter added.

For the first quarter, MTN saw its constant currency service revenue increased by 11,1% and EBITDA by 15,6% with EBITDA margin improving by 2,1pp to 43,2%, in line with medium-term targets.

The group recorded voice, data and fintech revenue growth of 6,3%, 26,4% and 26,0% respectively as we continued to execute on our strategic objectives and progress toward becoming a digital operator. Digital revenue has returned to growth, increasing by 15,6%.

“We are encouraged by the service revenue growth of 11.1% which we achieved on a constant currency basis, this translated to 16.5% on a reported basis,” said MTN Group CFO, Ralph Mupita.

Mupita added: “Good cost control across the group supported the increase in group EBITDA margins, with a particular strong performance from MTN Ghana. Notwithstanding the impacts of COVID-19 in the first quarter, the balance sheet remained resilient and our cash and committed undrawn facilities was approximately R45 billion at the holding company level, providing us with sufficient liquidity during these uncertain and unprecedented times.

“We have experienced a continued surge in data traffic during the month of April, but voice traffic and mobile money transactions were under pressure given various lockdown measures taken across markets. Where lockdown measures have been lifted or relaxed recently, voice recharges and mobile money transaction volumes have improved. For now, we are maintaining our 3 – 5 years medium-term guidance but will update the capital markets in August of any changes when we release our H1 2020 results.”

According to Mupita, “it is still too early to assess the economic impact of the pandemic on our customers and reliably quantify the direct or indirect financial effects on our business. The remainder of the year will be shaped by the ramifications of the pandemic, and we will continue to update all stakeholders as the effects become clearer.”

“We are not only focused on managing the risks brought about by COVID-19, but also on the opportunities it creates in the accelerated digitalization it has brought about. We believe we are well positioned as a company to benefit from this evolution, especially given our focus on growth in our data, digital and financial services businesses. The Group remains focused on the execution of our BRIGHT strategy to deliver sustainable growth in our operations and value to our stakeholders.”

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