MTN deems 2015 “difficult”

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Africa’s largest operator group MTN said its 2015 results “reflect the challenging operating environment the business experienced”, including its well documented woes in Nigeria.

Its performance was “lower than expected”, with macroeconomic conditions, currency issues, competition, and “operational challenges” in some markets also taking their toll.

While the removal of sanctions in Iran was a plus, it also noted “ongoing challenges in Syria, Sudan, Yemen and Afghanistan”, and regulatory issues in Nigeria.

There were positives: the company’s subscriber base increased by 4.1 per cent to 232.5 million, despite the disconnection of 10.4 million accounts to meet regulatory requirements in Nigeria and Uganda.

And group data revenue also increased, and including digital services, this contributed 23.1 per cent of total revenue.

“We are hopeful that we will see improvements in operating conditions during 2016,” it said in a statement.

MTN continued to expand its Group Digital Services offering, with key focus areas being “e-commerce, digital media and mobile financial services”. It said it is now the largest distributor of music in Africa, and has more than 800 companies providing 5,500 content services as part of its lifestyle offering.

The company reported a profit of ZAR20.2 billion ($1.29 billion) for the year, down from ZAR32.08 billion, on revenue of ZAR147.06 billion, up from ZAR146.93 billion. It noted a ZAR9.29 billion provision for the regulatory fine in Nigera.

The Nigeria provision was not the sole negative: EBITDA excluding this still decreased by 7 per cent to ZAR68.41 billion.

Revenue was flat due to a decline in voice revenue in Nigeria and a reduction in handset revenue in South Africa, following an industrial dispute which impacted sales. This was largely offset by an increase in data revenue across the business.

Among a number of other factors cited were network rollout costs, higher lease costs following the sale of towers, and commission payments associated with new revenue streams coming on line.

Capital expenditure increased by 15.7 per cent to ZAR29.2 billion, with a key focus being 3G and LTE rollouts.