MTN: MTN Group reports strong 2021 results, enhances financial guidance on accelerating data and fintech services
MTN Group reported strong financial, operational and sustainability results in 2021 in a tough macro environment. These were delivered through strong strategic execution and sustained commercial momentum across 19 markets, in the year in which Africa’s leading mobile operator started implementing its refreshed Ambition 2025 strategy.
“We adapted to the extraordinary circumstances brought about by the COVID-19 pandemic and started shaping the MTN of the future through the execution of Ambition 2025,” said MTN Group President and CEO Ralph Mupita.
In constant-currency terms, service revenue grew by 18.3% to R171.8 billion; earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 23.7% to R80.8 billion; and the EBITDA margin expanded by 2.2 percentage points to 44.5%. The Board declared a final dividend of 300 cents per share.
“The performance was underpinned by pleasing growth in our larger operating companies, operating leverage and the benefits of our expense efficiency programme,” said Mupita, adding that headline earnings per share adjusted for non-operational items increased by 26.6%; return on equity expanded by 2.6 percentage points to 19.6%; and organic operating cashflow accelerated by 35.2% to R38.3 billion.
The results were delivered despite a slowdown in subscriber additions related to industry-wide regulations in Nigeria. At year-end, MTN Group had a total of 272.4 million subscribers, up 2.9 million from end-2020. Greater adoption of data and fintech services resulted in the addition of 11.1 million new data users and 10.4 million new Mobile Money users to reach totals of 122.0 million and 56.8 million respectively. To cater for the 53.3% expansion in data traffic and 41.1% increase in fintech volumes, we continued to invest in the capacity and resilience of our networks and platforms, deploying total capex of R32.7 billion in the year.
We increased our financial flexibility to capture the opportunities identified by Ambition 2025. We deleveraged the balance sheet, paying US$1.4 billion in dollar debt and improving the holding company leverage to 1.0x from 2.2x. This was boosted by cash of R18.4 billion repatriated from our operating companies and R4.1 billion in proceeds from our asset realisation programme (ARP) during the 2021 financial year. We anticipate further net proceeds of R8.8 billion from the public offer of MTN Nigeria shares and the sale of passive tower infrastructure, once completed.
Among other highlights of the ARP – which aims to reduce debt, simplify our portfolio, reduce risk and improve returns – were the New York Stock Exchange listing of IHS Towers, in which we have a 26% stake; the localisations of a number of our operating companies; and our exit from operations in Yemen and Syria.
We progressed work to build the largest and most valuable platforms, reporting strong growth in our fintech business. It now has 57 million monthly active users and generates 10 billion transactions with total transaction value of US$239 billion within the 2021 calendar.
With a step change in our approach to sustainability, we created more shared value. We connected 23 million more people to broadband and achieved rural broadband coverage of 83% against our target of 95% by 2025. We reduced the cost to communicate by a 15.3% average reduction in the costs of a GB of data across our markets. Our economic value added to nation states where we operate increased to R115 billion, with cash taxes paid up at R11 billion across our markets. We linked long-term incentives for executives to various ESG indicators, with a focus on reaching net zero emissions by 2040; progressing diversity and inclusion; and extending rural broadband.
With growth structurally sustaining at higher levels, we enhanced our medium-term guidance, raising our targets for Group service revenue growth and returns. The Board also adopted a revised dividend policy to provide guidance on an annual basis in March indicating the minimum ordinary dividend expected in the financial year ahead, aligned to the group capital allocation framework.
“We remain focused on providing leading digital solutions for Africa’s progress and creating shared value for our stakeholders. Our enhanced medium-term guidance reflects the growth we see across our markets, as we play our part in driving digital and financial inclusion across Africa,” concluded Mupita.
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