SENS Note - 24 November 2005
MTN interim results September 05
 
Group consolidated revenue increased by 25.2% to R17.2 billion (R13.7 billion). Excluding the contribution from new acquisitions, revenue has increased by 22.3% against the comparable period in the previous year. MTN South Africa continues to record good growth in a maturing market, with revenue increasing by 19.2% to R9.8 billion, while MTN Nigeria's revenue growth of 28.7% to R5.9 billion was achieved despite the negative effects of the highly competitive tariff environment. EBITDA increased by 27.6% to R7.2 billion and, mainly as a result of the increased contribution to the group's results by the international operations, EBITDA margin increased from 40.1% to 41.7%. MTN South Africa maintained an EBITDA margin of 32.7%, consistent with that of the comparable period in the previous financial year. MTN Nigeria continued to deliver a strong EBITDA margin of 52.2%, with the remaining international operations, excluding new investments, recording EBITDA margins of between 46% and 54%. Net finance costs declined from R45 million to R23 million for the six months to 30 September 2005. Foreign exchange gains of R52 million (R90 million) were recorded in the period, excluding which, net finance costs would have been R75 million (R135 million). Finance costs remained low due to the positive net cash position of the group. The group's adjusted headline EPS increased by 30.8% to 222.5c. South African operations contributed 109.7c or 49% of these earnings, representing an increase of 28% on the first six months of the previous financial year. Adjusted headline EPS derived from international operations increased by 33% to 112.8c.

Balance sheet and cash flow
The group's total assets have increased by 23.2% to R36.6 billion compared to the restated R29.7 billion at 31 March 2005. Long-term borrowings increased to R3.7 billion (March 2005: R3.3 billion), while short-term borrowings increased to R972 million (March 2005: R220 million). At 30 September 2005, the group had cash on hand of R5.2 billion including securitised cash deposits of R350 million against letters of credit in Nigeria. Operating cash flow of R5.3 billion (before dividends) was generated, with free cash flow (operating cash inflows before dividends less capital expenditure) of R1.3 billion being generated notwithstanding the major investment of R4.1 billion in fixed assets.

Prospects
The group's vision is to be the leader in telecommunications in developing markets. The group currently has operations in nine countries across Africa. In order to further consolidate its position on the continent and to diversify its investment portfolio, the group will continue to explore value-enhancing expansion opportunities in Africa and the middle east. Business opportunities complementary to the core mobile telephony business will also be pursued. The group has changed its financial year end to 31 December, and will be reporting on the results for the nine months ending 31 December 2005 in March 2006. With the change in year end, the board will review the dividend policy at the end of the nine month reporting period taking into consideration expansion opportunities.
 
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