|MTN Press Release|
Seventeenth Annual General Meeting – business update and projects
|Issued by: MTN|
[Johannesburg, 30 May 2012]
At the Annual General Meeting to be held later today, MTN Group President and Chief Executive Officer, Sifiso Dabengwa, will make the following comments regarding the group's performance for the first four months of 2012 in comparison with the same period for 2011.
The majority of the markets in which MTN operates showed strong subscriber growth despite continued high levels of competition. The group increased its subscriber base by 5.2% for the four months from 31 December 2011 to 30 April 2012, and has subsequently passed 173.1 million mobile subscribers across its 21 operations.
The group showed sound double-digit revenue growth for the period compared with the corresponding period for 2011. This was mainly due to a weaker rand against the USD and strong growth in South Africa, Iran and Ghana. The growth rate in Nigeria was dampened by ongoing price competition, while Syria's revenue declined due to continued unrest in the country. Cameroon, Cote d'Ivoire and Uganda also showed healthy revenue growth for the period compared to 2011. Data and SMS revenue continued to deliver robust growth in most markets, increasing their contribution to total revenue.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) margins were slightly down when compared with the same period last year and with 2011 full-year margins. This was mainly due to lower EBITDA margins in Nigeria, Ghana and South Africa. The implementation of cost optimisation initiatives remains a focus.
The majority of MTN's operations continue to make good progress on network roll-out. It is anticipated that more than 70% of the 2012 capital expenditure guidance will be committed by end June 2012. Full-year capitalisation will be close to the 2012 guidance provided previously.
MTN South Africa performed well during the period. Revenue showed good growth largely due to increased contributions from data and SMS revenue. EBITDA margins declined mainly due to the impact of a lower interconnect margin. Handset and accessories costs, which increased partly due to the depreciation of the rand against the USD and higher post-paid connections, also had a negative impact on the margin.
MTN Nigeria's local currency airtime and subscription contribution to total revenue slowed due a decline in tariffs during 2011, which was not compensated by a proportionate increase in minutes of use. This, together with a lower interconnect margin, has resulted in some pressure on the EBITDA margin. The key focus for the Nigeria operation is to improve the network quality and capacity to enhance competitiveness. Good progress has been made on the capital expenditure roll-out programme implemented from late 2011.
MTN Irancell continued to deliver strong revenue growth when compared to the same period last year. This was attributable to a variety of attractive promotions and improved usage. EBITDA margins have remained healthy despite sharp increases in costs due to the removal of subsidies from the beginning of 2011.
In line with MTN's strategy to improve returns to shareholders, MTN has bought back shares to the value of R1.36 billion between 8 March 2012 and 28 May 2012. The total value of shares bought back, including repurchases made during the 2011 financial year, amounted to R2.29 billion. The total number of shares repurchased equates to 0.9% of MTN Group's issued share capital. This distribution to shareholders is in addition to the 70% dividend payout ratio announced previously. The MTN board will continue to implement share buybacks on an opportunistic basis.
MTN is working with the US authorities to manage its compliance with US sanctions against Iran. MTN also continues to retain international legal advisors to assist the group in remaining compliant with applicable EU, US and UN sanctions.
As disclosed on 29 March 2012, Turkcell served its complaint against MTN in the US Courts (District of Columbia) on 28 March 2012. MTN believes there is no legal merit to Turkcell's claim and no basis for such claim to be brought before a US court and will accordingly oppose the claim. The Hoffmann Committee's investigation into Turkcell's allegations is well under way, and the committee is expected to make recommendations to the MTN board later in the year.
The group continues to focus on maintaining and improving its market position and, in particular, strengthening its position in non-voice services in all markets. Evolving our business model to support ICT, upgrading our networks and cost optimisation initiatives are a priority. Improving the customer experience is central to this strategy. MTN believes that it is well-placed to take advantage of value accretive opportunities while mitigating the various risks it faces.
The group's external auditors have not reported on the information in this business update.
Issued by MTN Group Corporate Affairs