MTN Group’s shares took a beating on the JSE after it said yesterday for the first quarter of 2023, it continued to navigate difficult macroeconomic, geopolitical and regulatory conditions, including South African load shedding, as it reported revenue growth.
By 5pm the share price was 5.13% lower at R109. 10 on the JSE yesterday.
In its quarterly update for the period ended March 31, 2023, released yesterday, the group said revenue grew by 15.6% to R52.8 billion, with data usage jumping by more than a quarter. Core profit grew 11% to more than R24 billion, but fell almost 7% in South Africa.
The group's core profit margin dropped by 2.7% points year on year to 43.7%.
MTN Group president and CEO Ralph Mupita said: “MTN’s resilient business model and operational execution enabled us to continue to successfully navigate difficult macroeconomic, geopolitical, and regulatory conditions in the first quarter of 2023.
“The blended inflation across our footprint remained elevated and averaged 18.5% in Q1 (quarter one) 2023, compared to 11.5% in Q1 2022. Interest rates increased during the period as central banks acted to curb inflation. Higher inflation and interest rates weighed on consumers’ spending power and impacted business activity,” he said.
Mupita said local currencies generally weakened against the dollar, and foreign exchange availability was limited in several of MTN's key markets affecting the pace of capital expenditure and its ability to upstream dividends and management fees.
“Over and above reduced economic activity in South Africa, MTN South Africa’s (MTN SA) network availability remained under pressure due to ongoing power outages across the country: there were approximately 90 days of load shedding in Q1 2023 compared to 14 days in Q1 2022,” he said.
Mupita said MTN Nigeria, MTN Ghana and MTN Uganda delivered double-digit service revenue growth. MTN SA delivered positive service revenue growth, up 1.3%, against the severe impacts of load shedding in the quarter.
Voice revenue grew by 6.6%, while data revenue up by 26.9%; and total subscribers increased by 5.2% to 290.6 million.
“Active data subscribers are up by 11.9% to 140.4 million, while active Mobile Money (MoMo) users increased by 5.2% to 61.7 million. Data traffic increased by 19.3% to 3 221.26 PB, and Fintech transaction volumes increased by 38.8% to 4.1 billion,” MTN Group said.
MTN said it was evaluating an exit from Guinea-Bissau, Guinea-Conakry, and Liberia in west Africa over the medium term. The group had received an offer for its equity interests in those three units from Axian Telecom, which was being evaluated.
Looking ahead, the group said: “We anticipate that trading conditions across markets will remain challenging for the remainder of 2023, and we will continue to execute our proactive measures to manage the near-term challenges and risks.
“Within this environment of elevated inflation, implementing selective price increases across the portfolio remains a critical priority to ensure that operations generate sufficient cash flows to fund future capital expenditure needed for building world-class networks. We will continue to have the necessary engagements with the regulatory authorities on such needed increases.”
BUSINESS REPORT