Wrap Text
M-CELL LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1994/009584/06)
("M-CELL")
A JOHNNIC GROUP SUBSIDIARY
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000
- REVENUE UP 40%
- EBITDA UP 45%
- BASIC HEADLINE EARNINGS PER SHARE - SOUTH AFRICAN OPERATIONS UP 72%
- BASIC HEADLINE EARNINGS PER SHARE - TOTAL UP 59%
- DIVIDEND PER SHARE UP 30%
CONSOLIDATED INCOME STATEMENT
6 MONTHS 6 MONTHS 12 MONTHS
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 % 2000
REVIEWED UNAUDITED CHANGE AUDITED
RM RM RM
REVENUE 3 844,6 2 736,9 40 6 007,9
COST OF SALES (1 582,2) (1 007,9) (2 324,3)
GROSS PROFIT 2 262,4 1 729,0 31 3 683,6
OPERATING EXPENSES
- NET (1 039,9) (884,6) (1 662,4)
EARNINGS BEFORE
INTEREST, TAXATION,
DEPRECIATION AND
AMORTISATION
("EBITDA") 1 222,5 844,4 45 2 021,2
DEPRECIATION (319,2) (239,3) (522,1)
AMORTISATION (78,6) (65,4) (130,7)
PROFIT FROM
OPERATIONS BEFORE
GOODWILL AMORTISATION 824,7 539,7 53 1 368,4
GOODWILL AMORTISATION (120,0) - -
PROFIT FROM OPERATIONS 704,7 539,7 31 1 368,4
FINANCE COSTS (130,7) (140,0) (235,0)
FINANCE INCOME 50,0 52,8 92,9
SHARE OF LOSSES OF
ASSOCIATES (2,1) - (0,8)
PROFIT BEFORE TAXATION 621,9 452,5 37 1 225,5
TAXATION (248,0) (142,9) (407,6)
PROFIT AFTER TAXATION 373,9 309,6 21 817,9
MINORITY INTERESTS (61,4) (87,0) (229,3)
ATTRIBUTABLE EARNINGS 312,5 222,6 40 588,6
CONTRIBUTION TO
ATTRIBUTABLE EARNINGS:
SOUTH AFRICA 477,0 225,9 111 616,3
MTN 473,9 222,7 113 615,3
ORBICOM 3,1 3,2 1,0
REST OF AFRICA (43,2) (5,0) (29,0)
MTN (36,0) (5,0) (29,0)
ORBICOM (7,2) - -
CORPORATE HEAD OFFICE (1,3) 1,7 1,3
BASIC HEADLINE EARNINGS 432,5 222,6 94 588,6
GOODWILL AMORTISATION (120,0) - -
ATTRIBUTABLE EARNINGS 312,5 222,6 40 588,6
BASIC EARNINGS PER
ORDINARY SHARE (CENTS)
- HEADLINE 30,9 19,4 59 50,7
SOUTH AFRICA 34,0 19,8 72 53,2
REST OF AFRICA (3,1) (0,4) (2,5)
- ATTRIBUTABLE 22,3 19,4 15 50,7
DIVIDEND PER ORDINARY
SHARE (CENTS)
- INTERIM 3,0 2,3 30 2,3
- FINAL N/A N/A 5,6
3,0 2,3 30 7,9
DIVIDEND COVER ON
BASIC HEADLINE
EARNINGS (TIMES) 8,9 8,3 6,1
NUMBER OF ORDINARY
SHARES IN ISSUE:
- WEIGHTED AVERAGE
('000) 1 399 253 1 148 680 1 160 090
- AT PERIOD END ('000) 1 617 345 1 168 705 1 249 132
SUMMARISED CONSOLIDATED BALANCE SHEET
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
REVIEWED UNAUDITED AUDITED
RM RM RM
ASSETS
NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT 4 197,5 3 259,9 3 923,4
GOODWILL 11 404,0 - -
INTANGIBLE ASSETS 498,0 142,6 523,7
INVESTMENTS AND LOANS 238,2 185,4 211,6
DEFERRED TAXATION 17,7 - 0,8
16 355,4 3 587,9 4 659,5
CURRENT ASSETS 2 186,5 1 348,8 1 703,3
BANK BALANCES, DEPOSITS AND CASH 551,2 369,9 332,7
OTHER CURRENT ASSETS 1 635,3 978,9 1 370,6
TOTAL ASSETS 18 541,9 4 936,7 6 362,8
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
ORDINARY SHAREHOLDERS' INTEREST 14 252,0 1 522,8 1 923,4
MINORITY INTERESTS - 589,7 580,2
TOTAL EQUITY 14 252,0 2 112,5 2 503,6
NON-CURRENT LIABILITIES 2 718,9 1 578,5 2014,0
LONG TERM LIABILITIES 1 994,2 1 256,5 1 505,3
DEFERRED TAXATION 724,7 322,0 508,7
CURRENT LIABILITIES 1 571,0 1 245,7 1 845,2
NON-INTEREST BEARING LIABILITIES 1 397,0 1 196,6 1 349,5
INTEREST BEARING LIABILITIES 174,0 49,1 495,7
TOTAL EQUITY AND LIABILITIES 18 541,9 4 936,7 6 362,8
NET ASSET VALUE PER ORDINARY
SHARE (RAND)
- BOOK VALUE 8,81 1,30 1,54
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
6 MONTHS 6 MONTHS 12 MONTHS
ENDED ENDED ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
REVIEWED UNAUDITED AUDITED
RM RM RM
CASH INFLOWS FROM OPERATING
ACTIVITIES 866,4 765,0 1 567,0
CASH OUTFLOWS FROM INVESTING
ACTIVITIES (712,0) (677,6) (1 788,4)
CASH INFLOWS (OUTFLOWS) FROM
FINANCING ACTIVITIES 73,6 (221,8) 359,1
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 228,0 (134,4) 137,7
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 380,4 492,8 251,2
FOREIGN ENTITIES TRANSLATION
ADJUSTMENT (30,6) (4,0) (8,5)
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 577,8 354,4 380,4
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
REVIEWED UNAUDITED AUDITED
RM RM RM
BALANCE AT 1 APRIL 1 923,4 788,4 788,4
NET PROFIT ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 312,5 222,6 588,6
DIVIDENDS (48,5) (26,9) (96,9)
NET GOODWILL ARISING ON
ACQUISITION OF SUBSIDIARIES
WRITTEN BACK - - 1 274,5
SHARE CAPITAL ISSUED AT A
PREMIUM LESS SHARE ISSUE EXPENSES 12 095,0 4 197,2 6 429,5
GOODWILL WRITTEN OFF AGAINST SHARE
PREMIUM ACCOUNT - (3 658,8) (7 054,1)
EXCHANGE DIFFERENCES ARISING ON
TRANSLATION OF OVERSEAS OPERATIONS (30,4) 0,3 (6,6)
ORDINARY SHAREHOLDERS' INTEREST 14 252,0 1 522,8 1 923,4
NOTES
1. BASIS OF ACCOUNTING
THESE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS ARE PREPARED IN
ACCORDANCE WITH AC 127 AND SCHEDULE 4 OF THE SOUTH AFRICAN COMPANIES ACT (ACT
61 OF 1973 AS AMENDED). THE ACCOUNTING POLICIES ARE CONSISTENT WITH THOSE USED
IN THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2000, EXCEPT
THAT GOODWILL ARISING AFTER 1 APRIL 2000 IS ACCOUNTED FOR AS AN ASSET IN THE
BALANCE SHEET AND AMORTISED OVER A MAXIMUM PERIOD OF 20 YEARS. GOODWILL
TOTALLING R7054,1 MILLION WAS WRITTEN OFF DIRECTLY AGAINST SHARE PREMIUM IN THE
PREVIOUS YEAR.
2. COMPARATIVES
WHERE NECESSARY, COMPARATIVE FIGURES HAVE BEEN ADJUSTED TO CONFORM WITH CHANGES
IN PRESENTATION IN THE CURRENT PERIOD.
3. INDEPENDENT REVIEW BY THE AUDITORS
THIS INTERIM REPORT HAS BEEN THE SUBJECT OF A REVIEW BY OUR AUDITORS
PRICEWATERHOUSECOOPERS INC., WHO HAVE PERFORMED THIS REVIEW IN ACCORDANCE WITH
THE GUIDELINE ENTITLED "GUIDANCE FOR AUDITORS ON REVIEW OF INTERIM FINANCIAL
INFORMATION", ISSUED BY THE SOUTH AFRICAN INSTITUTE OF CHARTERED ACCOUNTANTS.
THE OBJECTIVE OF THE REVIEW WAS TO ENABLE PRICEWATERHOUSECOOPERS INC. TO REPORT
THAT NOTHING CAME TO THEIR ATTENTION THAT CAUSED THEM TO BELIEVE THAT THE
INTERIM FINANCIAL INFORMATION NEEDS MODIFICATION, SO AS TO FAIRLY PRESENT IN
ACCORDANCE WITH SOUTH AFRICAN STATEMENTS OF GENERALLY ACCEPTED ACCOUNTING
PRACTICE, THE FINANCIAL POSITION OF THE GROUP AT 30 SEPTEMBER 2000 AND THE
RESULTS OF ITS OPERATIONS AND CASH FLOW INFORMATION FOR THE PERIOD THEN ENDED.
IT SHOULD BE RECOGNISED THAT THEIR REVIEW DID NOT CONSTITUTE AN AUDIT WHERE A
HIGH LEVEL OF ASSURANCE IS EXPRESSED ON THE FAIR PRESENTATION OF THE INTERIM
FINANCIAL INFORMATION. ACCORDINGLY, PRICEWATERHOUSECOOPERS INC. EXPRESSED ONLY
A MODERATE LEVEL OF ASSURANCE ON THE FAIR PRESENTATION OF THE INTERIM FINANCIAL
INFORMATION.
A COPY OF THEIR UNQUALIFIED REVIEW REPORT IS AVAILABLE FOR INSPECTION AT THE
REGISTERED OFFICE OF THE COMPANY.
4. EARNINGS PER ORDINARY SHARE
THE CALCULATION OF BASIC HEADLINE EARNINGS PER ORDINARY SHARE IS BASED ON NET
PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS BEFORE GOODWILL AMORTISATION OF
R432,5 MILLION (1999: R222,6 MILLION) AND A WEIGHTED AVERAGE OF 1 399 252 904
(1999: 1 148 679 579) ORDINARY SHARES IN ISSUE DURING THE PERIOD.
NO FULLY DILUTED EARNINGS PER ORDINARY SHARE, IN RESPECT OF DEBENTURES
CONVERTIBLE INTO ORDINARY SHARES, HAVE BEEN DISCLOSED AS THE POTENTIAL DILUTION
IS NOT MATERIAL.
30 SEPT 2000 30 SEPT 1999 31 MARCH 2000
REVIEWED UNAUDITED AUDITED
RM RM RM
5. INTEREST BEARING DEBT
LONG TERM LIABILITIES 1 994,2 1 256,5 1 505,3
CURRENT LIABILITIES 174,0 49,1 495,7
- CALL BORROWINGS 4,1 15,5 0,9
- SHORT TERM BORROWINGS 169,9 33,6 494,8
2 168,2 1 305,6 2 001,0
6. CAPITAL EXPENDITURE
INCURRED 614,0 612,7 1 597,8
7. CONTINGENT LIABILITIES
AND COMMITMENTS
GUARANTEES (US$) 108,0 - 108,0
OPERATING LEASES 884,9 481,3 710,2
COMMITMENTS FOR CAPITAL
EXPENDITURE
- CONTRACTED 468,4 394,5 167,3
- APPROVED BUT NOT
CONTRACTED 1 034,4 370,9 1 815,4
8. CASH AND CASH
EQUIVALENTS BANK
BALANCES, DEPOSITS
AND CASH 551,2 369,9 332,7
LOANS TO AFFILIATED
COMPANIES RECEIVABLE
ON DEMAND 30,7 - 48,6
CALL BORROWINGS (4,1) (15,5) (0,9)
577,8 354,4 380,4
SEGMENTAL ANALYSIS
6 MONTHS ENDED 6 MONTHS ENDED 2 MONTHS ENDED
30 SEPT 2000 30 SEPT 1999 31 MARCH 2000
REVIEWED UNAUDITED AUDITED
RM RM RM
GEOGRAPHIC
REVENUE
SOUTH AFRICA 3 695,4 2 690,2 5 877,0
REST OF AFRICA 149,2 46,7 130,9
3 844,6 2 736,9 6 007,9
EBITDA
SOUTH AFRICA 1 200,9 838,1 2 003,6
REST OF AFRICA 25,8 8,0 24,0
CORPORATE HEAD OFFICE (4,2) (1,7) (6,4)
1 222,5 844,4 2 021,2
BUSINESS GROUPING
REVENUE
WIRELESS
TELECOMMUNICATIONS 3 799,1 2 693,8 5 928,0
SATELLITE
TELECOMMUNICATIONS 45,5 43,1 79,9
3 844,6 2 736,9 6 007,9
EBITDA
WIRELESS
TELECOMMUNICATIONS 1 223,6 835,4 2 013,8
SATELLITE
TELECOMMUNICATIONS 3,1 10,7 13,8
CORPORATE HEAD OFFICE (4,2) (1,7) (6,4)
1 222,5 844,4 2 021,2
REVIEW OF OPERATIONS
OVERVIEW
M-CELL HAS MAINTAINED ITS EXCELLENT GROWTH RATE DURING THE SIX MONTHS UNDER
REVIEW. THE UPWARD MOMENTUM IN SUBSCRIBER NUMBERS HAS CONTINUED UNABATED. THIS
HAS FUELLED STRONG GROWTH IN EARNINGS, PARTICULARLY IN SOUTH AFRICA WHERE BASIC
HEADLINE EARNINGS PER SHARE INCREASED BY 72%.
THE COMPANY REALISED ITS GOAL OF ACQUIRING 100% OF MTN THROUGH THE PURCHASE OF
THE REMAINING 23% SHAREHOLDING IN MTN FROM TRANSNET LIMITED ("TRANSNET"). THE
ACQUISITION WAS SETTLED BY THE ISSUE OF 366 MILLION NEW ORDINARY SHARES TO
TRANSNET, AND EFFECTIVELY RESULTS IN MTN BEING FULLY LISTED THROUGH M-CELL.
THE M-CELL GROUP HAS CONTINUED WITH ITS EXPANSION PROGRAM OUTSIDE SOUTH AFRICA.
THIS HAS MANIFESTED IN A NUMBER OF SUCCESSFUL TRANSACTIONS IMPLEMENTED DURING
THE PERIOD, INCLUDING THE LAUNCH OF MTN CAMEROON EARLY IN THE HALF YEAR; THE
LICENSING OF MTN'S PROPRIETARY MOBILE INTERNET TECHNOLOGY, REMOTE INTERACTIVE
VOICE RESPONSE ("RIVR"), TO THE ITALIAN MOBILE OPERATOR, WIND; THE SIGNING OF A
MEMORANDUM OF UNDERSTANDING WITH LOCKHEED MARTIN GLOBAL TELECOMMUNICATIONS
("LOCKHEED MARTIN") TO PROVIDE SATELLITE DELIVERED INTERNET AND
TELECOMMUNICATION SERVICES ACROSS AFRICA; AND THE ESTABLISHMENT OF AN
ELECTRONIC FUNDS TRANSFER ("EFT") NETWORK AND SWITCHING SYSTEM FOR THE BANKING
COMMUNITY IN GHANA.
RESULTS
BASIC HEADLINE EARNINGS PER SHARE REFLECTED A PLEASING GROWTH OF 59% OVER THE
SAME PERIOD LAST YEAR TO 30,9 CENTS FROM 19,4 CENTS. THE INCREASE IN BASIC
HEADLINE EARNINGS PER SHARE FROM SOUTH AFRICAN OPERATIONS WAS A HEALTHY 72% AT
34,0 CENTS, FROM 19,8 CENTS LAST YEAR. THIS INCREASE WAS, HOWEVER, NEGATED BY
DEVELOPMENTAL LOSSES INCURRED BY THE NEW OPERATIONS IN THE NON-SOUTH AFRICAN
OPERATIONS, PRIMARILY LOSSES IN CAMEROON AND GHANA. STRONG GROWTH IN THE MTN
SUBSCRIBER BASE ONCE AGAIN FUELLED A 40% GROWTH IN REVENUES TO R3 844,6
MILLION, FROM R2 736,9 MILLION LAST YEAR. THIS, TOGETHER WITH THE IMPROVEMENT
IN EBIDTA MARGINS TO 32% FROM 31% OVER THE SAME PERIOD LAST YEAR, RESULTED IN
EBIDTA GROWING 45% TO R1222,5 MILLION, FROM R844,4 MILLION LAST YEAR.
IMPROVED CAPITAL EFFICIENCIES RESULTED IN REDUCED CAPITAL EXPENDITURE REQUIRED
TO SUPPORT THE GROWING SUBSCRIBER BASE, THEREBY IMPROVING OPERATING PROFIT
BEFORE GOODWILL AMORTISATION BY 53% TO R824,7 MILLION, FROM R539,7 MILLION LAST
YEAR.
GOODWILL ARISING OUT OF THE ACQUISITION OF THE 23% STAKE IN MTN TOTALLING
R11524,0 MILLION HAS BEEN CAPITALISED AND IS BEING AMORTISED OVER A PERIOD OF
20 YEARS IN LINE WITH SOUTH AFRICAN STATEMENTS OF GENERALLY ACCEPTED ACCOUNTING
PRACTICE (AC 131 BUSINESS COMBINATIONS). IN THIS REGARD, THE INCOME STATEMENT
HAS BEEN CHARGED WITH GOODWILL AMORTISATION OF R120,0 MILLION FOR THE FIRST
TIME THIS YEAR AND HAS RESULTED IN PROFIT FROM OPERATIONS INCREASING AT A LOWER
RATE OF 31% OVER THE PREVIOUS YEAR TO R704,7 MILLION FROM R539,7 MILLION.
A TOTAL OF 366 MILLION NEW ORDINARY SHARES WERE ISSUED IN SETTLEMENT OF THE
ACQUISITION OF THE 23% INTEREST IN MTN. THIS HAS RESULTED IN THE SHARE CAPITAL
AND SHARE PREMIUM INCREASING BY R12 095,0 MILLION.
ATTRIBUTABLE EARNINGS PER SHARE INCREASED ONLY 15% TO 22,3 CENTS FROM 19,4
CENTS LAST YEAR AS A RESULT OF THE AMORTISATION OF GOODWILL AND THE INCREASE IN
THE NUMBER OF ORDINARY SHARES IN ISSUE.
MOBILE TELEPHONE NETWORKS HOLDINGS (PROPRIETARY) LIMITED ("MTN")
SOUTH AFRICA
TOTAL SUBSCRIBERS CONTINUED TO GROW RAPIDLY DURING THE SIX MONTH PERIOD TO 2,7
MILLION AT THE HALF YEAR COMPARED TO 1,4 MILLION AT THE SAME TIME LAST YEAR.
THIS RESULTED IN REVENUE GROWTH FROM THE SOUTH AFRICAN OPERATIONS OF 38% TO R3
649,9 MILLION, FROM R2 647,0 MILLION LAST YEAR.
EBITDA INCREASED 44% OVER LAST YEAR TO R1190,7 MILLION FROM R827,5 MILLION AND
HEADLINE EARNINGS REACHED R535,2 MILLION FROM R307,0 MILLION LAST YEAR. IN THE
LINE WITH GENERAL INTERNATIONAL TRENDS, THE PREPAID SUBSCRIBER BASE IS GROWING
FASTER THAN CONTRACT SUBSCRIBERS, RESULTING IN LOWER MINUTES OF USE, HENCE A
DECLINE IN REVENUE PER SUBSCRIBER.
REST OF AFRICA
THE OPERATIONS OUTSIDE SOUTH AFRICA ALSO ENJOYED A HEALTHY GROWTH IN
SUBSCRIBERS, REACHING 165 000 COMPARED TO ONLY 72000 AT THE SAME TIME LAST YEAR
REVENUES ROSE MORE THAN THREE FOLD COMPARED WITH THE SAME TIME LAST YEAR TO
REACH R149,2 MILLION FROM R46,7 MILLION.
ALL OPERATIONS, WITH THE EXCEPTION OF CAMEROON, TURNED IN POSITIVE EBITDA AND
HEADLINE EARNINGS FOR THE HALF-YEAR.
MOBILE E-COMMERCE
MTN HAS BEGUN TO EXPLOIT PROPRIETARY INTELLECTUAL CAPITAL DEVELOPED WITHIN THE
GROUP. THESE INCLUDE THE RIVR TECHNOLOGY THAT ENABLES WAP-TYPE MESSAGES TO BE
BROADCAST TO NON-WAP COMPLIANT MOBILE TELEPHONES AND THE EXCEEDINGLY POPULAR
SHORT MESSAGE SERVICES WEBSITE (MTNSMS.COM). REGISTERED SMS USERS HAVE REACHED
3,4 MILLION FROM AROUND THE WORLD. REVENUE GENERATING TRANSACTIONS ARE ALREADY
BEING CONCLUDED WITH PARTNERS THROUGHOUT THE WORLD. IN OCTOBER 2000, AN
ALLIANCE PARTNERSHIP WAS STRUCK WITH ALIASNET, AN ITALIAN SYSTEMS INTEGRATOR,
TO LICENCE RIVR TECHNOLOGY TO THE ITALIAN CELLULAR OPERATOR, WIND.
ORBICOM PROPRIETARY LIMITED ("ORBICOM")
ORBICOM HAS CONTINUED TO DEVELOP ITS SATELLITE COMMUNICATIONS BUSINESS WITH A
NUMBER OF TRANSACTIONS BEING CONCLUDED DURING THE PERIOD UNDER REVIEW. MOST
SIGNIFICANT WAS THE ESTABLISHMENT OF AN EFT NETWORK AND SWITCH SYSTEM FOR THE
BANKING COMMUNITY IN GHANA AND THE SIGNING OF THE MEMORANDUM OF UNDERSTANDING
WITH LOCKHEED MARTIN TO PROVIDE SATELLITE DELIVERED INTERNET SERVICES ACROSS
AFRICA.
TURNOVER REACHED R45,5 MILLION FOR THE HALF-YEAR UP FROM R43,1 MILLION LAST
YEAR. DEVELOPMENTAL LOSSES WERE INCURRED IN THE NON-SOUTH AFRICAN OPERATIONS
TOTALLING R7,2 MILLION, RESULTING IN EBITDA AND HEADLINE EARNINGS DECLINING TO
R3,1 MILLION AND A LOSS OF R4,1 MILLION, RESPECTIVELY.
PROSPECTS
THE GROUP CONTINUES TO EXPLOIT OPPORTUNITIES THAT ARE PRESENTED BY THE
CONVERGENCE IN THE TELECOMMUNICATION, TECHNOLOGY AND MEDIA SECTORS. IT IS
EXPECTED THAT THE GROUP WILL INCREASE ITS OFFSHORE REVENUE FROM LICENSING
INNOVATIVE MOBILE E-COMMERCE TECHNOLOGIES WORLDWIDE THROUGH PARTNERSHIPS AND
ALLIANCES. IN SOUTH AFRICA MOBILE DATA BUSINESS CONTINUES TO GROW.
A UNIQUE OPPORTUNITY WILL EXIST IN THE NEAR FUTURE FOLLOWING THE DEREGULATION
OF THE SOUTH AFRICAN TELECOMMUNICATIONS INDUSTRY COUPLED WITH THE EXPLOSIVE
GROWTH IN E-COMMERCE. THE GROUP WILL FOCUS ON BROADBAND DELIVERY OF A WIDE
RANGE OF VALUE-ADDED SERVICES SUCH AS HIGH SPEED INTERNET ACCESS, VIDEO ON
DEMAND, VOICE AND CORPORATE MANAGED NETWORK SERVICES.
THESE WILL BE DELIVERED ACROSS A SINGLE INTEGRATED CORE NETWORK, WHICH IS
FLEXIBLE AND WILL MEET CUSTOMERS' CURRENT AND FUTURE VOICE, DATA AND E-COMMERCE
REQUIREMENTS.
WE WILL THEREFORE DEVELOP A STATE-OF-THE-ART BROADBAND FIBRE OPTIC NETWORK. THE
GROUP WILL BE FORMING A CONSORTIUM WITH AN INTERNATIONAL STRATEGIC EQUITY
PARTNER/S TO BID FOR THIS OPPORTUNITY.
DELAYS CONTINUE TO BE EXPERIENCED WITH THE AWARD OF THE 3RD CELLULAR LICENCE.
THE REVIEW PROCESS IS CONTINUING.
THE REGULATOR DENIED MTN AND VODACOM ACCESS TO THE 1800 MHZ SPECTRUM.
CONSULTATIONS CONTINUE WITH THE REGULATOR AND VARIOUS OPTIONS ARE UNDER
CONSIDERATION. THE TIMING OF THE 3G LICENCING PROCESS REMAINS UNCLEAR, HOWEVER
MTN HAS ADEQUATE SPECTRUM TO ENSURE CONTINUED GROWTH FOR THE FORESEEABLE FUTURE
MTN CONTINUES TO PURSUE ITS GROWTH STRATEGY THROUGHOUT AFRICA AND IS CONFIDENT
OF ACQUIRING NEW OR EXISTING LICENCES. THE GROUP HAS VARIOUS INITIATIVES
UNDERWAY TO EXPLOIT THESE OPPORTUNITIES.
MTN INTENDS TO PARTICIPATE IN AN AUCTION PROCESS IN NIGERIA TO ACQUIRE ONE OF
THE FOUR DIGITAL MOBILE LICENCES ON OFFER. THE PROCESS IS EXPECTED TO BE
COMPLETED BY THE FINANCIAL YEAR END.
ORBICOM WILL EXPLOIT TECHNOLOGIES SUCH AS INTERNET PROTOCOL ("IP") OVER
SATELLITE AND CORPORATE DATA CONNECTIVITY. THE ALLIANCE WITH LOCKHEED MARTIN
AND THE ROLLOUT OF THE EFT NETWORK IN GHANA ARE EXPECTED TO GENERATE
SUBSTANTIAL REVENUES FOR ORBICOM IN THE FUTURE. THE GROUP INTENDS TO EXPAND THE
EFT, INTERNET SERVICES, RURAL TELEPHONY AND EDUCATION VIA SATELLITE ACROSS
AFRICA.
THE GROUP'S BALANCE SHEET REMAINS STRONG WITH DEBT EQUITY RATIOS AT ACCEPTABLE
LEVELS PROVIDING THE GROUP WITH CAPACITY TO FUND EXPANSIONS INTO THE FUTURE.
DIVIDEND
M-CELL'S CORE BUSINESSES OPERATE IN HIGH GROWTH SECTORS. THE GROUP HAS ADOPTED
A DIVIDEND POLICY, WHICH WILL ALLOW THE BUSINESSES TO RETAIN AND REINVEST THE
BULK OF THE CASH IT GENERATES TO FUND FUTURE GROWTH. A TARGET DIVIDEND COVER
RATIO OF 5 TO 6 TIMES HEADLINE EARNINGS WILL BE FOLLOWED.
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000, AN ORDINARY DIVIDEND NO 6 OF 3
CENTS PER SHARE HAS BEEN DECLARED, PAYABLE ON 12 JANUARY 2001 TO SHAREHOLDERS
REGISTERED AT THE CLOSE OF BUSINESS ON 8 DECEMBER 2000.
FOR AND ON BEHALF OF THE BOARD
I CHARNLEY J R D MODISE
(CHAIRPERSON) (DIRECTOR)
22 NOVEMBER 2000
JOHANNESBURG
DIRECTORS: I CHARNLEY (CHAIRPERSON), Z N A CINDI, P EDWARDS*, CR JARDINE, PM
JENKINS, A S MABOGOANE, J R D MODISE, GT SEROBE,
(ALTERNATE: LC WEBB)
*BRITISH
COMPANY SECRETARY: M R D BOYNS*
TRANSFER SECRETARIES: MERCANTILE REGISTRARS LIMITED
11 DIAGONAL STREET
JOHANNESBURG 2001
P O BOX 1053
JOHANNESBURG 2000
REGISTERED OFFICE: 28 HARRISON STREET
JOHANNESBURG 2001
P O BOX 231
JOHANNESBURG 2000
THESE RESULTS CAN BE VIEWED ON THE WEBSITE AT HTTP://WWW.M-CELL.CO.ZA
E-MAIL: INVESTOR-RELATIONS@JOHNNIC.CO.ZA