SENS Note - 03 August 2017

MTN interim results June 2017

Revenue for the interim period decreased to R64.4 billion (2016: R79.1 billion), EBITDA increased to R24.4 billion (2016: R18.9 billion), operating profit jumped to R10 billion (2016: R5.2 billion), profit attributable to equity holders of the company turned around to R5.2 billion (2016: loss of R5.5 billion), while headline earnings per share came in at 217 cents per share (2016: loss of 271 cents per share). Dividend A gross interim dividend of 250 cents per share for the period to 30 June 2017 has been declared. Company prospects Africa and the Middle East remain among the world's key growth regions over the medium to long term. As the prospects for telecommunications are closely aligned to this growth trajectory, we see a number of opportunities and believe that MTN is well placed to benefit given our unique position in the markets in which we operate. With a strengthened leadership team, the Group continues to work towards achieving our vision "to lead the delivery of a bold, new Digital World to our customers". We will continue to leverage our scale and enhance our competitive position, benefiting from favourable demographic growth (that will mitigate expected future declines in voice revenue), low data penetration in our markets and the unique opportunity we have to provide our customers with a wide range of digital services across our operations. To ensure that management remains focused on delivering on the BRIGHT strategy to the benefit of our stakeholders, we will establish clearly defined initiatives and KPIs for each of the six areas of "BRIGHT" in the second half of the year. We expect these initiatives to support improved top-line growth, EBITDA margins and cash flow over the medium term. Our recent extensive capex investments across our operations will enable the business to provide a superior customer experience and competitive data networks. This will support the increasing demand for data and digital services. We have reduced our capex guidance for 2017 to R30.0 billion from previous guidance of R34.8 billion. We expect to accelerate expenditure in the second half and meet the revised capex guidance for the full year. MTN Nigeria continues to make progress with preparations to list MTN Nigeria shares on the Nigerian Stock Exchange. We anticipate completing this process in 2018, should market conditions permit. MTN Ghana is working with relevant regulators on a transaction to increase Ghanaian ownership of MTN Ghana shares. We expect to complete this in the course of 2017. We remain on track to meet our FY2017 guidance despite the muted economic growth forecast across our markets. In South Africa, we expect mid-single-digit service revenue growth and EBITDA margin expansion of 50 and 100 basis points year-on-year (YoY). This will be supported by a strong focus on customer service and significantly improved network quality, capacity and speed. Targeted cost-optimisation initiatives will support EBITDA growth. We do not expect the recent credit ratings downgrade of MTN following the sovereign downgrade of South Africa to have a material impact on existing facilities or the cost of new funding in 2017. In Nigeria, we anticipate upper single-digit revenue growth YoY. This will be supported by an improved competitive position, improved network quality and capacity, smartphone penetration and an increased focus on growing data and digital revenue. We expect continued improvement in foreign currency liquidity following central bank interventions since February 2017. Encouragingly, post period end MTN Nigeria declared an interim dividend which after adjusting for withholding taxes and minorities will result in USD95 million being received by MTN Group. In Iran, we expect to benefit from growth in the Iranian economy and from the country's youthful population, particularly in the digital services space. The Group will continue to focus on the upstreaming of dividends across all operations, including MTN Irancell.

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