Press Releases
MTN cements emerging markets leadership with 40 million subscribers
MTN reports 40 051 000 subscribers in healthy annual results and declares a 90 cents dividend per share
Highlights of results for the 12-month period ended 31 December 2006
- Group subscribers up 73% to 40 million
- Revenue up 49% to R52 billion*
- EBITDA up 53% to R22 billion*
- EBITDA margin of 43.4%, up from 42.4%* driven by operational efficiency improvements
- PAT of R12 billion up from R7 billion for the previous nine-month period
- Adjusted HEPS of 584.7 cents from 338.2 cents for the previous nine-month period
- Acquisition of Investcom LLC concluded, effective July 2006
* compared to previous unaudited 12-month period
The MTN Group is pleased to announce that its annual results for the financial year ended 31 December 2006 have continued to show strong growth in Group revenue and subscriber base. MTN recorded a 73% increase in subscribers to 40 million, firmly establishing the Group as the emerging markets leader.
The MTN Group has also declared a dividend of 90 cents per share in light of a strong free cash flow generation coupled with its strong financial position. This is the highest dividend ever declared by MTN.
Overview of Results
MTN uses segmental reporting to reflect the performance of the Group within defined operating regions viz South and East Africa (SEA), West and Central Africa (WECA) and Middle East and North Africa (MENA). Investcom operations have expanded the company’s footprint across Africa and the Middle East and contributed to earnings of the WECA and MENA regions.
The Group’s revenue increased by 49% to R52 billion when compared to the prior 12-month period to 31 December 2005*. The revenue increase was driven mainly by the acquisition of Investcom LLC and increased subscriber numbers. Excluding the R6 billion revenue impact from Investcom, the year-on-year growth in Group revenue would have been 32%. The Southern region was the largest contributor at 49% followed by WECA and MENA at 41% and 10% respectively.
The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 53% to R22 billion when compared to the prior comparable 12-month period.* Excluding the R2,4 billion impact of Investcom, the year-on-year growth in Group EBITDA would have been 36%.*
The SEA region contributed 39%, which is lower than its higher revenue contribution given its lower EBITDA margins. WECA contributed 52% of total EBITDA. The start-up nature of many of the MENA operations has resulted in a relatively small contribution of 5% to Group EBITDA.
Adjusted profit after tax (PAT) increased to R12 billion compared to R7 billion for the nine months to December 2005.
Basic headline earnings per share (EPS) rose to 606.5 cents for the period, 69% above the 359.8 cents for the nine months ended 31 December 2005.
Subscribers in the SEA region increased by 27% to 16 million, the WECA region by 80% to 20 million and MENA recorded five million subscribers. Excluding the impact of Investcom’s 8,4 million subscribers, the year-on-year growth was 36% with Nigeria and South Africa accounting for 17% and 10% respectively.
Investcom subscribers grew 38% in the six-month period from July 2006, reflecting the lower base and greater growth opportunities in these relatively under-penetrated markets. The first quarter of 2007 has shown faster subscriber growth for MTN Irancell as it improves on coverage, distribution and brand awareness. By 25 March 2007, MTN Irancell had recorded more than one million subscribers, commissioned 588 BTS stations and covered 49 cities.
The MTN Group’s balance sheet transformed substantially following the acquisition of 100% of Investcom LLC as well as additional shares in MTN Uganda and MTN Nigeria as well as other acquisitions during the year. These acquisitions had a material impact on the balance sheet of the Group, resulting in a cash outflow of R28.7 billion, as well as the issue of more than 189 million new shares with corresponding increases in intangible assets and long-term borrowings.
Says MTN Group President and CEO, Mr Phuthuma Nhleko: “I am pleased with our performance in 2006. Our subscriber growth is strong and reflects well on our expansion efforts, especially the acquisition of Investcom LLC. The continued increase in EBIDTA margin is a positive outcome of the operational efficiency initiatives we have undertaken in the last two years. The solid growth of the Investcom operations in the last six months is consistent with our strategy of applying operational efficiencies in low penetration, high growth markets.
“Our focus for 2007 includes, among others, driving regional synergies, taking advantage of opportunities within the value chain and improving operational efficiency through our least-cost operator strategy. Bedding down the Iran operation remains material to the Group’s performance.”
* compared to previous unaudited 12-month period
| MTN Group Subscribers
|
| ARPU (USD)
|
|
| 31 December 2006
(000)
|
|
| South and East Africa
|
| South Africa
| 12 483
| 23
|
| Swaziland
| 268
| 20
|
| Botswana
| 600
| 19
|
| Zambia
| 187
| 19
|
| Uganda
| 1 595
| 12
|
| Rwanda
| 384
| 17
|
| Sub total
| 15 517
|
|
| West and Central Africa
|
| Nigeria
| 12 281
| 18
|
| Ghana
| 2 585
| 17
|
| Cameroon
| 1 783
| 15
|
| Cote d'Ivoire
| 1 625
| 18
|
| Congo Brazzaville
| 280
| 20
|
| Liberia
| 218
| 18
|
| Benin
| 476
| 21
|
| Guinea Conakry
| 276
| 17
|
| Guinea Bissau
| 98
| 12
|
| Sub total
| 19 622
|
|
| Middle East and North Africa
|
| Sudan
| 1 066
| 16
|
| Iran
| 154
| 9
|
| Afghanistan
| 218
| 14
|
| Syria
| 2 237
| 17
|
| Yemen
| 1 161
| 10
|
| Cyprus
| 76
| 35
|
| Sub total
| 4 912
|
|
| TOTAL
| 40 051
|
|