|MTN interim results June 2019|
|08 August 2019 7:09|
|Revenue for the interim period increased to R72.5 billion (2018: R62.8 billion), operating profit jumped to R15.3 billion (2018: R10.8 billion), profit attributable to equity holders of the company was recorded at R4.4 billion (2018: R4.4 billion), while headline earnings per share lowered to 195 cents per share (2018: 215 cents per share).
Declaration of interim ordinary cash dividend
Notice was given that a gross interim dividend of 195 cents per share for the period to 30 June 2019 has been declared.
Prospects and guidance
Well positioned to deliver growth
Guided by our BRIGHT strategy, we are well positioned to grow by leveraging our scale and enhancing our competitive position. Our markets are characterised by significant population growth, youthful demographics, low levels of smartphone penetration and data and digital adoption, as well as large unbanked populations. The enterprise and wholesale sectors are relatively undeveloped and growing fast. The combination of our large customer base, extensive networks and deep distribution gives us access to large pools of revenue. We are committed to building a digital operator, being a scale player in both the evolving telco and fintech and digital services spaces.
Following data price reductions in South Africa and Nigeria, we expect price elasticity in the second half of the year to improve data revenue growth. We expect lower wholesale revenue in MTN South Africa to be a drag on service revenue following the end of the national wholesale deal with Telkom on 28 June 2019.
We plan to launch MoMo in South Africa in the second half of the year. On the back of the award of the super-agent licence in Nigeria, we will accelerate our fintech ambitions and now fully leverage the extensive distribution we have across the country to offer a range of transfer and payment services to our GSM customer base.
We will continue to work towards obtaining a payment service banking licence in Nigeria. We will roll out our MTN Homeland offering, allowing money to be sent to MoMo recipients in Africa from Europe quickly and affordably.
We will continue to expand our insurance business and leverage the partnership with Sanlam that we announced in July 2019.
We plan to roll out Ayoba in Nigeria, South Africa, Uganda and Liberia in the second half of the year. We will also integrate payments into the Ayoba service as part of our broadening of the fintech business, as well as integrate Ayoba into MTN segmented offers. After launching our time-based music streaming service MusicTime! in South Africa in December 2018, we plan to launch this next in Nigeria and Ghana.
We reiterate our guidance for the medium term (3 to 5 years) of double-digit growth in group service revenue in constant currency terms, double-digit growth in MTN Nigeria's service revenue and mid-single-digit growth in service revenue from MTN South Africa. Over this period, we expect to continue to increase our group EBITDA margin.
By leveraging historical investments, improved procurement processes and an increasing revenue contribution from our digital businesses, we expect the group capex intensity to steadily improve over the medium term.
Our improving revenue growth, margins and capex intensity are anticipated to drive significant improvements in group returns and cash flow.
The board remains committed to targeting growth of 10% to 20% in the dividend.
MTN board changes
In May, we announced changes to the board. Chairman Phuthuma Nhleko will step down on 15 December 2019, when chairman-designate Mcebisi Jonas will take the helm. This follows a specific request from our largest shareholder that the board consider extending Nhleko's term beyond the date originally envisaged of 31 December 2018.
On 15 December 2019, Dr Khotso Mokhele will assume the responsibilities of lead independent director and Alan Harper, Jeff van Rooyen and Koosum Kalyan will step down from the board. Peter Mageza and Dawn Marole will retire as directors on 30 April 2020.
On 1 July 2019 Lamido Sanusi and Vincent Rague joined the board as non-executive directors.
We also announced the establishment of an international advisory board (IAB). The IAB is a non-statutory entity which does not undertake fiduciary duties. It comprises prominent persons of considerable and wide-ranging experience. The primary purpose of the IAB will be to counsel the MTN Group in fulfilling its objective of being one of the premier African corporations and provide perspectives as it strives to contribute to certain areas of development in the countries where MTN operates. While the IAB will be non-statutory in nature and not have any fiduciary responsibility, it will make an important contribution in ensuring that the board is assisted in achieving MTN's vision in a technically complex world with uncertain and shifting geopolitical interests.
The IAB is chaired by His Excellency former President of the Republic of South Africa, President Thabo Mbeki and constituted of:
- His Excellency President John Kufuor, former President of Ghana
- Dr Aisha Abdullahi, former African Union Commissioner for Political Affairs
- Dr Mohammed ElBaradei, former Director General of the International Atomic Energy Agency
- Dr Momar Nguer, President of Marketing & Services, Total S.A. (France)
- Phuthuma Nhleko, Chairman of MTN Group
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