MTN
MTN
MTN - MTN Group Limited - 17TH Annual General Meeting - Business update and
propects
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN ZAE000042164)
("MTN" or "the Group")
17TH ANNUAL GENERAL MEETING - BUSINESS UPDATE AND PROPECTS
1. BUSINESS UPDATE
At the Annual General Meeting to be held later today, MTN Group President
and Chief Executive Officer, Sifiso Dabengwa will make the following
comments regarding the Group`s performance for the first four months of
2012 in comparison with the same period for 2011:
The majority of the markets in which MTN operates showed strong subscriber
growth despite continued high levels of competition. The Group increased
its subscriber base by 5.2% for the four months from 31 December 2011 to 30
April 2012 and has subsequently passed 173.1 million mobile subscribers
across its 21 operations.
The Group showed sound double digit revenue growth for the period compared
with the corresponding period for 2011. This was mainly due to a weaker
rand against the USD and strong growth in South Africa, Iran and Ghana. The
growth rate in Nigeria was dampened by ongoing price competition while
Syria`s revenue declined due to continued unrest in the country. Cameroon,
Cote d`Ivoire and Uganda also showed healthy revenue growth for the period
compared to 2011. Data and SMS revenues continued to deliver robust growth
in most markets, increasing their contribution to total revenue.
Group earnings before interest, tax, depreciation and amortisation (EBITDA)
margins were slightly down when compared with the same period last year and
with 2011 full year margins. This was mainly due to lower EBITDA margins in
Nigeria, Ghana and South Africa. The implementation of cost optimisation
initiatives remains a focus.
The majority of MTN`s operations continue to make good progress on network
rollout. It is anticipated that more than 70% of the 2012 capital
expenditure guidance will be committed by end June 2012. Full year
capitalisation will be close to the 2012 guidance provided previously.
MTN South Africa performed well during the period. Revenue showed good
growth largely due to increased contributions from data and SMS revenues.
EBITDA margins declined mainly due to the impact of a lower interconnect
margin. Handset and accessories costs, which increased partly due to the
depreciation of the Rand against the USD and higher postpaid connections,
also had a negative impact on the margin.
MTN Nigeria`s local currency airtime and subscription contribution to total
revenue slowed due a decline in tariffs during 2011, which was not
compensated by a proportionate increase in minutes of use. This, together
with a lower interconnect margin, has resulted in some pressure on the
EBITDA margin. The key focus for the Nigeria operation is to improve the
network quality and capacity to enhance competitiveness. Good progress has
been made on the capital expenditure roll out program implemented from late
2011.
MTN Irancell continued to deliver strong revenue growth when compared to
the same period last year. This was attributable to a variety of attractive
promotions and improved usage. EBITDA margins have remained healthy despite
sharp increases in costs due to the removal of subsidies from the beginning
of 2011.
2. PROSPECTS
In line with MTN`s strategy to improve returns to shareholders, MTN has
bought back shares to the value of R1,36 billion between 8 March 2012 and
28 May 2012. The total value of shares bought back, including repurchases
made the during 2011 financial year, amounted to R2,29 billion. The total
number of shares repurchased equates to 0,9% of MTN Group`s issued share
capital. This distribution to shareholders is in addition to the 70%
dividend payout ratio announced previously. The MTN board will continue to
implement share buybacks on an opportunistic basis.
MTN is working with the US authorities to manage its compliance with US
sanctions against Iran. MTN also continues to retain international legal
advisors to assist the Group in remaining compliant with applicable EU, US
and UN sanctions.
As disclosed on 29 March 2012, Turkcell served its complaint against MTN in
the US Courts (District of Columbia) on 28 March 2012. MTN believes there
is no legal merit to Turkcell`s claim and no basis for such claim to be
brought before a US court and will accordingly oppose the claim. The
Hoffmann Committee`s investigation into Turkcell`s allegations is well
underway and the Committee is expected to make recommendations to the MTN
board later in the year.
The Group continues to focus on maintaining and improving its market
position and in particular strengthening its position in non-voice services
in all markets. Evolving our business model to support ICT, upgrading our
networks and cost optimisation initiatives are a priority. Improving the
customer experience is central to this strategy. MTN believes that it is
well placed to take advantage of value accretive opportunities while
mitigating the various risks it faces.
The Group`s external auditors have not reported on the information in this
Business Update.
Fairland
29 May 2012
Sponsor
Deutsche Securities (SA) (Pty) Ltd
Date: 29/05/2012 12:00:02 Produced by the JSE SENS Department.
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