| MTN is a pan-African mobile operator with the strategic intent of ‘Leading digital solutions for Africa’s progress’. We have 288 million customers in 17 markets and are inspired by our belief that everyone deserves the benefits of a modern connected life |
| Third quarter (Q3) 2024 key messages |
| · Solid overall commercial momentum in the core connectivity business |
| · Strong fintech result, underpinned by robust advanced services growth |
| · Good progress in the execution of strategic priorities |
| · Balance sheet resilience | Cash upstreaming and localisation proceeds |
| · Challenging macroeconomic trends eased in Q3 2024 |
| · Medium-term guidance maintained |
| Highlights |
| ● Group service revenue decreased by 18.5% (up 12.9%* in constant currency) |
| o Voice revenue decreased by 31.3% (up 1.0%* in constant currency) |
| o Data revenue decreased by 15.3% (up 21.3%* in constant currency) |
| o Fintech revenue growth of 8.5% (up 28.9%* in constant currency) |
| ● Total subscribers increased by 1.6% to 288 million |
| ● Active data subscribers up by 7.4% to 152.8 million |
| ● Mobile Money (MoMo) monthly active users (MAU) increased by 5.7% to 61.5 million |
| ● Data traffic increased by 34.1% to 14 141 PB |
| ● Fintech transaction volumes increased by 17.4% to 14.9 billion | Transaction value increased by 27.1%* to US$229.2 billion |
|
Rm |
YTD∞ 3Q 24 |
YTD 3Q 23 |
YTD %
change reported |
YTD % change
constant currency |
3Q 24
% change reported |
3Q 24
% change constant
currency |
Contribution to
Group |
| Group service
revenue |
127 370 |
156 295 |
-18.5% |
12.9% |
-13.4% |
14.7% |
|
| - South Africa |
32 017 |
30 993 |
3.3% |
3.3% |
3.3% |
3.3% |
25.0% |
| - Nigeria |
29 912 |
58 255 |
-48.7% |
33.3% |
-36.0% |
35.4% |
23.0% |
| - Ghana |
15 818 |
14 968 |
5.7% |
31.9% |
-1.5% |
33.4% |
12.2% |
| - Uganda |
11 242 |
9 493 |
18.4% |
20.1% |
14.6% |
19.5% |
8.6% |
| Group EBITDA~ (before once-off
items) |
45 691 |
70 308 |
-35.0% |
3.4% |
-20.8% |
11.6% |
|
| - South Africa# |
14 278 |
13 866 |
3.0% |
3.0% |
0.4% |
0.4% |
32.9% |
| - Nigeria |
10 914 |
30 314 |
-64.0% |
-5.9% |
-49.9% |
6.0% |
24.0% |
| - Ghana |
8 855 |
8 422 |
5.1% |
32.2% |
-1.8% |
33.9% |
21.0% |
| - Uganda |
5 871 |
4 866 |
20.7% |
22.4% |
17.1% |
22.2% |
13.3% |
| Group EBITDA
margin |
33.8% |
42.8% |
-9.0 pp |
-3.2 pp |
-3.6pp |
-0.8pp |
|
| - South Africa# |
36.3% |
36.4% |
-0.1 pp |
-0.1pp |
-1.1pp |
-1.1pp |
|
| - Nigeria |
36.2
% |
51.7% |
-15.5 pp |
-15.2 pp |
-10.4pp |
-10.4pp |
| - Ghana |
55.8% |
56.0% |
-0.2 pp |
0.2pp |
-0.1pp |
0.3pp |
| - Uganda |
51.7% |
50.5% |
1.2 pp |
1.2pp |
1.5pp |
1.5pp |
| Capital expenditure
(capex, IFRS 16) |
42 563 |
43 921 |
|
|
|
|
| - Capex (ex-leases) |
19 841 |
26 166 |
|
|
|
|
| - Capex intensity
(ex-leases) |
14.7% |
15.9% |
|
|
|
|
| |
|
|
~ Earnings before interest, tax, depreciation and amortisation |
| ∞ Year-to-date |
| # Excludes tower sale gain |
| Unless otherwise stated, financial and non-financial growth rates are presented on a constant currency basis and are year-on-year (YoY, 9M to September 2024 versus 9M to September 2023). |
| Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access data and excludes roaming and wholesale. Fintech includes MoMo, insurance, airtime lending and e-commerce. Active data users are a count of all subscribers at a point in time who had a revenue-generating event in the specified period (90 days) before that point in time and during the past 30 days had data usage greater than or equal to 5 megabytes. MoMo users are 30-day active users. |
| Group President and CEO Ralph Mupita comments: |
| Navigating challenging macro and regulatory conditions, though trends eased in Q3 |
| “In the first nine months of 2024, MTN Group navigated a challenging macro environment and regulatory developments to deliver a resilient operating performance. There was an encouraging deceleration in blended inflation and reduced currency volatility across our markets in Q3 2024 relative to the first two quarters of the year. |
| Blended inflation across our footprint eased to an average of 13.9%, compared to 17.1% in the same period of 2023. The naira continued to depreciate, closing the period at N1 541/US$ (December 2023: N907) and having a material impact on our reported results. However, the naira was less volatile on a sequential basis in Q3 than in preceding quarters. The rand strengthened, ending September 2024 at R17.22 (December 2023: R18.27). While the cedi weakened by 19.5% against the US dollar, the Ugandan shilling strengthened YTD by 2.4%. |
| Solid operational execution and performance |
| With a continued focus on our strategic priorities, we invested a capex of R19.8 billion in our networks and platforms, reflecting a capex intensity of 14.7% – compared with our medium-term target range of 15-18%. This helped to support the robust data traffic growth of 34.1% (37.0% excluding JVs) and fintech transaction volumes (up 17.4%) that underpin our growth thesis. |
| The Group delivered service revenue growth of 12.9%*, with MTN South Africa (MTN SA) reporting a 3.3% rise; MTN Nigeria, MTN Ghana and MTN Uganda’s service revenue increased by 33.3%*, 31.9%* and 20.1%* respectively. Excluding our operation in conflict-hit Sudan, Group service revenue growth was 14.0%*, which is in line with our mid-teen growth target. |
| Our subscriber base grew by 1.6% to 288 million by the end of September 2024, affected by subscriber registration regulations in Nigeria and a decline in users in Sudan, where millions of people have been displaced by the conflict in that country. The underlying expansion of the subscriber base was 4.3% when adjusted for Nigeria and Sudan. Overall, the Group’s active data users increased by 7.4% to 152.8 million (up 7.9% excluding JVs), supporting data revenue growth of 21.3%. |
| Demand for fintech services remained strong, with the number of active MoMo users up by 5.7% to |
| 61.5 million (excluding OTC customers). Fintech revenue increased by 28.9%*, with continued pleasing development of advanced services revenue, which grew by 53.1%*. The EBITDA margin within the fintech business improved on a YoY basis, to the top end of our targeted range of mid to high-30%. |
| Overall Group EBITDA increased by 3.4%*, with several macro factors putting upward pressure on our costs – these included elevated inflation, foreign exchange (forex) movements and the conflict in Sudan. These pressures were mitigated by savings derived from the successfully renegotiated tower lease contracts in Nigeria in August 2024. |
| The revised terms with IHS in Nigeria reduced the US dollar-indexed component of the leases linked to a discounted US consumer price index (CPI) and removed technology-based pricing, ensuring that payments for new upgrades will be based on tower space and power usage. The renegotiated agreements incorporate an energy cost component indexed to the cost of providing diesel power; however, the terms also include discounts and incentives over the life of the contracts. |
| In the current period, the accrued operating expense (OPEX) savings from the effective date of the contract on 1 April 2024 was approximately R603 million as of the end of September, and free cash flow savings amounted to approximately R502 million. Also supported by the ongoing progress made with our Group-wide expense efficiency programme, the overall EBITDA margin narrowed by 3.2pp* to 37.3%*. |
| Progress on key strategic initiatives |
| We continued to advance our strategic priorities, including our localisation initiatives. In Q3, we achieved an additional 2.1% localisation in Ghana, bringing the local shareholding in Scancom PLC to 30%. This followed the successful sell-down in June 2024 of a further 7% in MTN Uganda. We have now exited Guinea Bissau, as part of our portfolio optimisation, and work is underway to complete the exit from Guinea Conakry. |
| We are also pleased to have concluded the extension of the 2016 MTN broad-based black economic empowerment (B-BBEE) scheme operated through MTN Zakhele Futhi Limited (MTNZF). The proposal to extend the scheme was approved by both MTN Group and MTNZF shareholders at general meetings held after the period ends in October 2024. All related conditions precedent have been fulfilled. The extension aligns with our commitment to transformation and the creation of shared value for South Africans. It is integral to the ethos of MTN and we believe that B-BBEE participation is important to the future success of the Group. |
| Balance sheet and liquidity positions |
| The Group net-debt-to-EBITDA ratio of 0.8x in end-September 2024 remained well within our loan covenant limit of 2.5x. Holding company leverage of 1.8x was supported by cash upstreamed and localisation proceeds. We maintained a healthy liquidity position, with a headroom of R32.1 billion. |
| In Q3, MTN Group upstreamed cash of R2.2 billion from our operating companies, bringing the total cash upstreamed YTD to R8.7 billion. In addition, we realised approximately R600 million in gross localisation proceeds from MTN Ghana in Q3, bringing the total YTD proceeds from localisations to approximately R2.3 billion. |
| Outlook |
| Although the macro environment is forecast to remain challenging in the near term, we are encouraged by the abating trends in inflation in our footprint, as well as reduced volatility in forex movements. As these factors continue to normalise, we anticipate positive impacts on consumer spending power and our business operations. |
| We expect total capex deployment for FY 2024 to fall within our guidance of R28-33 billion (ex-leases) and to maintain capex intensity within our medium-term target range. This incorporates an expected uptick in MTN Nigeria’s capex in Q4, to support the increased traffic growth on the network being driven by stronger demand. Our work to achieve expense efficiencies of R7-8 billion between 2024 and 2026 continues, to mitigate the impacts of macro volatility on our business. |
| We will maintain our disciplined approach to capital allocation, focused operational execution, and strategic delivery in the final quarter of 2024. Our overall medium-term guidance framework and anticipated ordinary dividend of 330cps for FY 2024 remain unchanged.” |
| For the full document click the link below: |
| MTN Group |
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