MTN
MTN
MTN - MTN Group Limited - 16TH Annual General Meeting - Business update and
management of international operations
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN ZAE000042164)
("MTN" or "the Group")
16TH ANNUAL GENERAL MEETING - BUSINESS UPDATE AND MANAGEMENT OF INTERNATIONAL
OPERATIONS
1. BUSINESS UPDATE
At the Annual General Meeting to be held later today, Chief executive and
president, Sifiso Dabengwa will make the following comments regarding the
Group`s performance for the first four months of 2011 in comparison with the
same period for 2010:
The majority of the markets in which MTN operates have continued to show strong
subscriber growth despite increased competition. The Group increased its
subscriber base by 7.4 million subscribers or 5% to 149 million customers for
the four months to 30 April 2011 and has subsequently passed 150 million mobile
subscribers across its 21 operations.
Group revenue improved only marginally mainly as a result of the continued
strengthening of the rand against the USD and increased competition. Due to
political unrest, operational performance has been impacted negatively in Cote
d` Ivoire and to a lesser extent in Yemen and Syria. The average rand/USD
exchange rate to April 2011 was R6.86 compared to R7.48 in the same period last
year. Had there been no movement in the exchange rate, revenue and earnings
before interest, tax, depreciation and amortization ("EBITDA") would have been
meaningfully higher. Total revenue was still driven primarily by voice revenue
however non voice revenue contribution continues to increase.
Group EBITDA margins were up when compared with the same period last year but in
line with the overall margin at 31 December 2010. Margins in the majority of
MTN`s key markets remained robust. This was primarily due to the benefit of
ongoing cost control and efficiency initiatives despite the negative impact of
inflationary pressures and higher fuel costs. However, margins are under
significant pressure in markets experiencing high levels of price competition.
MTN`s spend on capital expenditure was lower than anticipated to the end of
April mainly due to slower than planned rollout in Nigeria, South Africa and
Ghana. However, a significant amount of the capital expenditure originally
anticipated for the period has already been committed. It is expected that these
projects will catch up in the second half of the year bringing the full year
capital expenditure substantially in line with the original guidance.
MTN South Africa sustained a sound financial performance in a relatively mature
market as data maintained good momentum. The operation`s EBITDA margin continued
to show a healthy trend upward mainly due to lower selling and distribution
costs and to a lesser extent the containment of network operating costs. It is
expected that the registration deadline on the 30 June 2011 will result in some
disconnections. As at 22 June approximately 93% of the prepaid and 98% of the
postpaid base had been registered.
MTN Nigeria revenue growth slowed marginally as increased usage offset, in part,
the decrease in tariffs implemented as part of a revised package offering in
February 2011. EBITDA margins remained robust at the same level as those
reported at 31 December 2010, despite the various competitive and operational
challenges.
MTN Irancell continued to deliver a solid performance growing local currency
revenue in the high 20 percent levels when compared to the same period last
year. EBITDA margins remained similar to those reported at 31 December 2010.
MTN believes that its current initiatives place it in good stead to take
advantage of value accretive opportunities while mitigating the various risks it
faces. MTN will continue to leverage its scale, operational capability and
intellectual capacity in an industry which has become more competitive as it
matures and evolves.
2. International operation
The board has decided that the formation of a formalized subsidiary company
board for the international operations will not be progressed at this point in
time. This follows their review of the work completed by the sub-committee of
the board appointed to investigate the matter.
The information in this Business Update has not been reported on by the Group`s
external auditors.
Fairland
22 June 2011
Sponsor
Deutsche Securities (SA) (Pty) Ltd
Date: 22/06/2011 14:43:16 Produced by the JSE SENS Department.
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