MTN Group reports continued commercial growth in the first quarter

MTN Group has announced an 11-percent rise in service revenue in the first quarter ended 31 March 2020.

Mr Rob Shuter, MTN Group President and CEO Speaking on the results in a statement, said ‘The effects of the COVID-19 pandemic on the global economy have brought about unprecedented uncertainty, volatility and challenges, which are impacting our markets at both the socio-economic and macro-economic levels.”

It said the impact of the pandemic on its first-quarter performance was not significant as lockdown restrictions for its consolidated subsidiaries were only implemented from the last week of March 2020.

“We continued to build commercial momentum, adding 6.6 million subscribers in the quarter, with active data users increasing by 2.9 million and MoMo subscribers by 0.4 million,” it added.

It said it continued to scale its Ayoba platform recording 2.6 million monthly active users and accelerated its MoMo agency network in Nigeria, under its super-agent license, adding 70, 000 agents in the first quarter, bringing the total number of registered agents to 178, 000.

On strategic progress, the statement said the digital business returned to growth, booking 15.6 percent in the first quarter.

It said in MTN South Africa, the enterprise business recorded its second quarter of growth and in May it commenced phase two of the national roaming agreement with Cell C and look forward to a continued partnership.

The statement said in these difficult times it continues to focus on its key priorities, looking after its people, its customers, and its networks, while it focuses on efficiencies.

It said for its people, the immediate priority was their health and safety, where the work-from-home programmes across its markets empower its staff to work remotely while ensuring continuity in its operations.

For its customers, it said it has ramped up its digital channels as a service alternative, to enable them to continue purchasing airtime and accessing its products and services seamlessly as well as launching Y’ello Hope Packages in most of our markets.

“Our various initiatives support governments across our markets with communication systems and connectivity as we do our part to help minimize the economic and social impact,” it added.

It said the Group would continue to focus on business continuity and efficiency, and we have implemented strict measures to preserve resources and strengthen our resilience.

On financial performance for the first quarter, MTN delivered a solid performance increasing constant currency service revenue by 11.1 percent and EBITDA by 15.6 percent with EBITDA margin improving by 2.1pp to 43.2 percent, in line with medium-term targets.

The group recorded voice, data, and fintech revenue growth of 6.3 percent, 26.4 percent, and 26.0 percent respectively as it continued to execute on its strategic objectives and progress toward becoming a digital operator.

“Digital revenue has returned to growth, increasing by 15.6 percent,” it said. Mr Ralph Mupita, MTN Group CFO, in the statement said ‘We are encouraged by the service revenue growth of 11.1 percent which we achieved on a constant currency basis, this translated to 16.5 percent on a reported basis.”

It said good cost control across the Group supported the increase in Group EBITDA margins, with a particularly strong performance from MTN Ghana.

The statement said notwithstanding the impacts of COVID-19 in the first quarter, the balance sheet remained resilient, and its cash and committed undrawn facilities was approximately R45 billion at the holding company level, providing us with sufficient liquidity during these uncertain and unprecedented times.

It said the current environment was marked by significant uncertainties and it was still too early to assess the economic impact of the pandemic on its customers and reliably quantify the direct or indirect financial effects on our business.

“The remainder of the year will be shaped by the ramifications of the pandemic, and we will continue to update all stakeholders as the effects become clearer,” it said.

The statement said the Company was not only focused on managing the risks brought about by COVID-19, but also on the opportunities it creates in the accelerated digitalization it has brought about.