MTN returns to profit, laments weakness of naira

Loses 8.5per cent subscribers in West and Central Africa

The telecommunications firm, MTN has announced a return to profit after what it described as a turbulent operation in 2016. In its first half-year financial report, released yesterday in Johannesburg, South Africa, MTN said it was on track to meet the financial year 2017 guidance, which it disclosed in March 2017.

Although the firm’s revenue for the first six months of the current financial year decreased by 19 per cent in constant currency terms, it, however, grew by 6.7 per cent.

It was underpinned by 10.8 per cent growth in revenue in Nigeria and a 5.2 per cent organic growth in service revenue in South Africa.

The firm said its headline earnings came in at 3.9 billion rand ($294.40 million), or 212 cents per share in the six months, compared with a loss of 4.9 billion rand, or 271 cents per share, a year earlier.

According to the report, the macro-economic conditions has remained a challenge across a number of its markets, with Nigeria continuing to experience a weaker naira, as well as hard currency liquidity challenges.

Although South Africa entered a technical recession in the first quarter, it claimed that the rand strengthened considerably against the US dollar during the period, while many of the currencies in its other markets weakened.

A further analysis of the interim report showed that the firm’s subscriber numbers fell by 3.6 per cent to a total of 231.8 million across its 22 operations in Africa and the Middle East.

The biggest drag on customer numbers for the half-year came from the West and Central Africa region, which dropped 8.5 per cent to 102.3 million. The most noticeable impact came from Nigeria, which saw subscriber numbers dropping by 14.3 per cent to 53.1 million and Ghana, where the subscriber base declined by 10.3 per cent to 17.3 million. But, subscribers in South Africa increased by 1.5 per cent to 31.2 million.
MTN said the customer decline was largely as a result of the group’s “initiative to modernise subscribers’ definitions to reflect the changing mix of revenue streams.”
The report added that MTN Uganda, MTN Ghana and MTN Ivory Coast also contributed positively to the group’s top-line growth.
It added that MTN Cameroon experienced a challenging period, which was negatively impacted by the data network shutdown in some parts of the country in the first quarter.
“These numbers give us hope for the future. It is a very encouraging platform upon which we would build our strategy,” said Rob Shuter, former Vodafone European head, who became MTN’s chief executive in March.