MTN South Africa net profit is down while revenues increase by 9.2%
MTN Group revenues increased by 9,2% to R111,9 billion and earnings before interest, tax and depreciation ("EBITDA") by 6.7% to R46,1 billion based on a sound operational performance for the year ended 31 December 2009. Movements in exchange rates in the year, mainly in the South African Rand ("ZAR") and Nigerian Naira ("NGN"), had a substantially negative impact on the Group's financial results. To illustrate this, had there been no change in currency rates during the year, reported revenues at year end would have been 11 percentage points higher, and EBITDA 12 percentage points above that reported. Adjusted headline earnings per share ("EPS") decreased by 16.6% to 754.3 cents and, excluding the impact of the functional currency losses, increased by 8.5% to 878.9 cents.
Said MTN Group President and CEO Phuthuma Nhleko: "The solid performance of MTN operations in most of the countries in which the Group has a presence was achieved despite economic challenges, increased regulatory changes and growing competition. Continued delivery in accordance with an aggressive network rollout strategy remained key throughout 2009, enabling MTN to maintain or improve its market share in most of its operations. Better distribution and a focus on segmental product offerings were other contributory factors. As a result, subscribers increased by 28,0% to 116,0 million for the period under review, indicating a continuing demand for mobile services in countries where mobile penetration is still relatively low".
MTN initiated several Group projects during 2009 which are being rolled out through most operations. Although many of these projects are still in progress, this Group-wide approach allows MTN to differentiate itself from the competition, thereby ensuring a stronger brand and product preference whilst leveraging its regional footprint. These projects include the following:
A coordinated effort to improve operational efficiencies through centralised procurement, best practice guidelines for site build, network management, safety and activity based costing.
Continued investments in Internet Service Providers ("ISP") across all regions have been made to ensure that MTN is favourably positioned. MTN South Africa acquired Verizon Business South Africa (Pty) Ltd in early 2009 and successfully integrated the company with Network Solutions. The combined entity was launched in September 2009 with a key focus on converged services to the corporate segment. It is envisaged that MTN Business, although South African based, will provide a Pan-African opportunity to service the corporate sector across and beyond MTN's footprint.
MTN has committed in excess of USD191 million in various submarine cables to ensure high-speed connectivity and improved quality and capacity of voice and data offerings. These include the East Africa submarine cable ("EASSy"); the Europe India gateway ("EIG"); SAT-3/SAFE; the East Africa Marine system ("TEAMs") and the West Africa Cable System ("WACS").
With an initial focus on money transfers, Mobile Money has been launched to date in South Africa, Uganda, Rwanda, Ghana, Côte d'Ivoire, Benin and Yemen. The success of MTN Uganda, which was first to launch the new service in March 2009, is indicative of the scale of the opportunity: to date, Uganda has more than 680,000 Mobile Money subscribers.
There have been many regulatory changes within the telecommunications industry over the past year, particularly focused on SIM registration and reductions in Mobile Termination Rates ("MTR"). Constructive and early engagement with regulatory authorities by management teams have ensured that MTN's operations have been generally well prepared for compliance with the regulatory changes implemented in 2009, and will be for those to follow in 2010.