|SENS Note - 28 May 2013|
|MTN -- AGM-business update and prospects|
At the annual general meeting to be held later today, MTN Group President and Chief Executive Officer Sifiso Dabengwa will make the following comments regarding the Group's performance for the first four months of 2013 compared to the same period in 2012: The majority of MTN's operations saw the trend in subscriber growth continue. The Group increased its subscriber base by 4% in the four months to 30 April 2013, reaching 197.4 million mobile subscribers across its operations. Group revenues increased 5.6% YoY.|
MTN Nigeria recorded strong growth in reported revenue for the first four months of 2013 compared with same period in 2012. This performance was supported by strong growth in subscriber numbers and usage. Rand reported revenues, up 15% YoY, were driven by a weaker rand against the US dollar while local currency revenues were down marginally YoY. (an average ZAR:USD rate of R9.00 in the first four months of 2013 compared to R7.71 in the same period in 2012).
Despite the larger-than-anticipated cut in termination rates in Nigeria, we remain comfortable with our guidance on MTN Nigeria’s revenue and EBITDA margin for the full year. The main focus for the Nigerian operation is to improve network quality and capacity to enhance competitiveness and cater for higher usage. We have made good progress on our capital expenditure rollout programme and continue our constructive dialogue with the regulator, the Nigerian Communications Commission, regarding its recent determination that MTN Nigeria is a dominant operator in that country. MTN South Africa’s performance was impacted by weaker consumer demand and increased competition, however the operation maintained its relative revenue share in the first four months of the year. MTN South Africa’s revenue for the period was largely underpinned by an increased contribution from data and SMS revenue. Its EBITDA margin declined marginally compared to the same period in 2012 and cost control remains a key focus given the more challenging revenue growth environment.
The Group's operations in Iran, Ghana, Sudan and Uganda showed healthy growth in both revenue and subscriber for the period. Group data and SMS revenue continued to expand strongly in most markets, increasing its contribution to total group revenue to approximately 18%. The implementation of cost-optimisation initiatives remains a key priority and EBITDA margins remain stable. Finance costs continue to be volatile given the movement in exchange rates. Mitigating the impact of this volatility on reported results remains a focus for management. Going forward some of the volatility will be limited as a result of a new basis for accounting for the forex losses/profit related to the Syrian dividend. This will now be dealt with in the balance sheet under IAS21 IFRS rules.
Looking forward, the Group continues to focus on broadening its offering, providing more services to customers by moving into the digital space, leveraging MTN's inherent strength in adjacent industries, creating a distinct customer experience and transforming its operating model. We expect to deliver improved organic growth in both revenue and EBITDA in 2013 and anticipate reaching the milestone of 200 million subscribers by the middle of the year. The Group’s external auditors have not reported on the information in this update.
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