MTN Group sees strong revenue growth across Africa in third quarter

MTN Group’s previously loss-making Nigeria subsidiary reported positive retained income and net equity positions and resumed dividend payments, the telecoms group said in a third-quarter trading update for the nine months to September 30, on Monday.

Group service revenue was up a strong 22.6%, earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 41.1%, while the EBITDA margin increased by 6.7 percentage points to 45%. Subscribers increased by 5.8% year-on-year to 301.3 million.

“We are particularly pleased to have crossed a formative milestone in connecting over 300 million customers across our markets,” they said.

Data revenue was up 35.4%. Revenue from the group fintech businesses was up by 23.1%. The number of active data subscribers increased 9.1% to 165.8 million. Data traffic was up 26.6%.

MTN SA’s service revenue increased by 2%, and its EBITDA margin slipped marginally by 0.6 percentage points to 35.8%.

MTN Nigeria's service revenue increased by a strong 57.1%. Its EBITDA margin of 51.3% reflected a gain of 15 percentage points. The shareholders’ equity position was positive, and dividend payments resumed.

MTN Ghana's service revenue increased by 35.9%, and its EBITDA margin was up by 2.3 percentage points to 58.4%.

MTN Uganda’s service revenue increased by 13.6%, and the EBITDA margin increased by 2.1 percentage points to 53.8%.

The group launched LEO (low earth orbit) partnerships with Starlink in Zambia and South Sudan. There was a collaboration with Microsoft for AI-enabled learning tools in select markets. The holding company held liquidity headroom of R36.9 billion.

On the outlook, the group said their investment case was underpinned by the structural demand for data and fintech services in the group markets. The focus would be to sustain the strong momentum of the group’s performance, buoyed by a more supportive macro-economic environment.

“MTN will focus on sustaining good growth in the postpaid and enterprise segments and continue to implement recovery initiatives in the prepaid market. In the next quarters, we expect MTN SA service revenue and EBITDA margin to track at the lower end of guidance before we see progress towards the upper end of medium-term targets.

MTN Nigeria's return to positive net equity has set a strong foundation for further growth and value creation.

MTN Ghana c focused on managing operational costs to protect margins and increase profitability while scaling its platforms. The expansion of its MoMo business and strengthening the entire fintech ecosystem remains a priority that underpins the sustained growth outlook of MTN Ghana.

The directors said they were “encouraged by the momentum” they saw in Opcos like MTN Uganda, MTN Cameroon, and MTN Sudan, while MTN Côte d'Ivoire, MTN Rwanda, and MTN Zambia were showing pleasing turnarounds.

“The work is ongoing to ensure that these trajectories are sustained and support the overall growth of the group,” they said.

Priorities for the fintech business remained the same. The focus would be to continue to leverage partnerships to scale the ecosystem faster. In addition, investment in the technology platform was beng accelerated to enhance customer experience and velocity within the business.

Capex of R33bn to R38bn was expected to be deployed for the full financial year to drive the growth of the business. The group medium-term guidance was left unchanged.

MTN’s share price fell by 13% to R166.24 on Monday afternoon.

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