SENS Note - 02 March 2017

MTN final results December 2016

Revenue for the year came in at R147.920 billion (2015: R147.063 billion), operating profit lowered to R14.142 billion (2015: R35.328 billion), loss attributable to equity holders of the Company came in at R2.614 billion (2015: profit of R20.204 billion), while headline loss per share was 77 cents per share (2015: earnings of 746 cents per share). Dividend The Board has declared a second half dividend of 450 cents per share, which will bring the total dividend for 2016 to 700 cents per share. Outlook The MTN Group continues to work towards achieving their vision of “leading the delivery of a bold, new Digital World to our customers”. Despite the recent disruptions in the markets in which they operate, Africa is still expected to be a key growth region over the medium to long term. MTN’s unique position in Africa and the changes made in 2016 provide a solid platform for the Group to realise its vision. The management team will continue to execute on IGNITE, focusing mainly on the transformation of MTN’s operating model and accelerating growth of new revenue streams. With a strengthened management team in place and new initiatives embarked upon, the group are confident and are resolved to enhance their competitive position across markets and meet the aggressive targets set. New revenue streams, particularly digital services, are expected to increase their contribution over the next 18 months, supported by a more focused approach and the process initiated to establish an advanced analytics unit. MTN expects their e-commerce joint ventures with AIH, MEIH and IIG to continue strong growth in customers and revenue, with improving unit economies. While AIH and MEIH are expected to be impacted by a slowing economy and the associated volatility of currencies in Nigeria and Egypt, IIG is expected to benefit from improving GDP growth. MTN's extensive capex investments made over the past two years across their operations will enable the business to provide superior customer experience and competitive data network. This will support the increasing demand for data and digital services. MTN Nigeria continues to make progress with its preparations to list MTN Nigeria shares on the Nigerian Stock Exchange. In addition to setting up a management task team, MTN Nigeria has appointed a lead issuing house, joint transaction advisors, global coordinators and legal advisors. While MTN remains committed to the listing, it is subject to suitable market conditions, macro-economic conditions. The listing is also subject to securing the appropriate approvals and certainty from relevant regulators and other stakeholders. MTN Ghana is working with relevant regulators on its localisation transaction, which is expected to be completed during the course of 2017. In Nigeria, MTN expects to further improve their competitive position despite a weaker economic environment. Network quality remains a priority. This improvement in competitive position, improved network quality and capacity, smartphone penetration and increased focus on new revenue streams are expected to support upper single-digit top-line growth. The group will continue to work closely with vendors to alleviate the current challenges with regard to the availability of US dollars. The group expects the depreciation of the naira against the US dollar to negatively impact the EBITDA margin in 2017 and 2018. However, IGNITE initiatives to be implemented over the next two years will partly offset the drag on reported EBITDA by 15 to 20% by 2018. MTN anticipates a positive growth trend in South Africa. In 2017, they expect mid-single-digit revenue growth and EBITDA margin expansion of between 50 and 100 basis points (bp) YoY supported by a strong focus on customer service, improved billing, significantly improved network quality, capacity and speed. A stronger network will facilitate greater customer retention. Cost optimisation and outsourcing of non-core functions will also support EBITDA growth. Through IGNITE, the group expects an improvement in reported EBITDA of the 2016 base of between 15% and 20% by the end of 2018. Going forward, the repatriation of monies from MTN Irancell is expected to be normalised. MTN expects growth in the Iranian economy (following the easing of sanctions) to offer significant opportunities to expand our services, particularly in the digital space, and to benefit further from MTN’s strong position and the country’s youthful population. MTN will continue to review infrastructure investment opportunities, including Iran.

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