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MTN GROUP LIMITED - Summary consolidated annual financial results for the year ended 31 December 2014

Release Date: 04/03/2015 07:05
Code(s): MTN     PDF:  
Wrap Text
Summary consolidated annual financial results for the year ended 31 December 2014

MTN Group Limited 
(Incorporated in the Republic of South Africa) 
Registration number 1994/009584/06 
Share code: MTN 
ISIN: ZAE000042164 
("the MTN Group", "MTN" or "the Group") 

Audited summary consolidated annual financial results 
for the year ended 31 December 2014 

MTN is a leading emerging markets mobile operator, connecting over 223 million people in 
22 countries across Africa and the Middle East. We are committed to continuously improving our 
customers' experience and delivering a bold, new Digital World to them. 

Highlights 

-  Group subscribers increased 7,5% to 223,4 million 
-  Revenue increased 6,4% to R146 154 million 
-  Data revenue increased 33,2% to R27 317 million 
-  EBITDA increased 10,2% to R65 520 million 
-  EBITDA margin increased 1,5 percentage points to 44,8% 
-  HEPS increased 8,9%** to 1 536 cents** 
-  Final dividend of 800 cents per share, with total dividend of 1 245 cents per share 
-  Capex decreased 16,3% to R25 242 million 
-  Cash inflow generated from operations increased 8,2%** to R64 628 million** 
-  Voice traffic and data traffic increased 6,5% and 85,8% respectively 

Note: Certain financial information presented in these results constitutes pro forma financial information.  The pro forma financial 
information is the responsibility of the Group's board of directors and is presented for illustrative purposes. Because of its nature, the 
proforma financial information may not fairly present MTN's financial position, changes in equity, results of operations or cash flows. An 
assurance report has been prepared and issued by our joint auditors PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Inc. in 
respect of the pro forma financial information included in this announcement that is available at the registered office of the Company. 

1.     The financial information presented in these results has been prepared excluding the impact of hyperinflation, goodwill impairment 
       and tower profits and constitutes pro forma financial information to the extent not extracted from the segment disclosure included 
       in the audited financial statements for the year ended 31 December 2014. This pro forma financial information has been presented 
       to eliminate the impact of hyperinflation, goodwill impairment and tower profits from the financial results in order to achieve a 
       comparable analysis year on year. Hyperinflation adjustments, goodwill impairment and tower profits have been calculated in terms 
       of the Group accounting policies disclosed in the consolidated annual financial statements. 
2.     Constant currency ("organic") information has been presented to illustrate the impact of changes in currency rates on the Group's 
       results. In determining the change in constant currency terms, the current financial reporting year's results have been adjusted to 
       the prior year's average exchange rates determined as the average of the monthly exchange rates which can be found on 
       www.mtn.com/investors. The measurement has been performed for each of the Group's currencies, materially being that of the US 
       dollar and Nigerian naira. The organic growth percentage has been calculated by utilising the constant currency results compared to 
       the prior year results. In addition, in respect of MTN Irancell, MTN Sudan and MTN Syria, the constant currency information has 
       been prepared excluding the impact of hyperinflation. 

* Constant currency ("organic") information. 

** Not adjusted for the impact of hyperinflation and/or tower profits. 
                                             
OVERVIEW          

The MTN Group's 2014 results reflect a challenging year, impacted by aggressive price competition, 
increased regulatory requirements and pressure on consumer expenditure. The sharp decline in the 
oil price in the second half of the year had a marked impact on the economies and exchange rates of 
a number of African and Middle Eastern countries. Notwithstanding these conditions, most of MTN's 
large and small operating companies (opcos) showed promising improvements in operational 
performance. 

The Group continued to benefit from encouraging growth in non-voice revenue, driven by various 
data initiatives (including the Mobile Money offering) across key markets. We also made good 
progress in transforming our operating model, particularly in reducing costs and monetising assets 
with the finalisation of the agreement to sell and lease back towers in Nigeria in the fourth quarter 
of 2014. 

MTN South Africa's performance was in line with our expectations and provided clear evidence in 
the second half of a successful turnaround with consistent month-on-month improvements in the 
last six months of the year. The large opco cluster recorded double-digit organic revenue growth and 
margin expansion and the small opco cluster delivered improvements in most operations. 
MTN Nigeria's performance was below expectations, impacted largely by regulatory determinations 
and economic pressures as well as operational challenges. 

Group subscribers increased by 7,5% to 223,4 million. This was driven by competitive pricing, 
segmented offerings and improved network quality and capacity in many markets. Group subscriber 
numbers were, however, affected by the alignment of internal subscriber reporting methodology in 
Cameroon, which negatively impacted reported subscriber numbers by approximately 1,6 million.  

Group revenue grew by 6,4% in the year. This was largely the result of an increase of 12,1% in 
MTN Nigeria's revenue and a decline of 3,9% in MTN South Africa's revenue. Data revenue increased 
by 33,2% in the year, to contribute 18,7% to total revenue at year end. Both our large and small 
opco clusters delivered pleasing results, with reported revenue growth of 7,1% and 13,0% 
respectively.  

Group EBITDA increased by 10,2% to R65 520 million. We made further progress in our cost 
optimisation efforts, which supported a 1,5 percentage points expansion in the EBITDA margin to 
44,8% for the year.  

Capital expenditure was R25 242 million, 16,3% lower than the previous year. During 2014, the 
Group's operations rolled out 3 669 2G, 6 491 largely co-located 3G and 684 LTE sites, facilitating 
increased voice and data usage on our network.  

Cash inflows generated by operations increased by 8,2%** to R64 628 million**.  

PROSPECTS 

In 2015, MTN expects to benefit from a number of interventions put in place in South Africa and 
Nigeria in the previous year. In South Africa, we expect to build on the positive momentum gained 
on revenue and subscriber additions in the second half of 2014. The South African operation will also 
accelerate its immediate capex plans to support our medium-term growth prospects, particularly in 
the data area. 

MTN Nigeria will focus on active subscriber management, providing more competitive offerings and 
improving data usage. We continue to engage positively with the regulator. However, in Nigeria 
some level of uncertainty remains with regards to the implications of the oil price and currency 
fluctuations, which may lead to slower economic growth. This may result in some headwinds for the 
business in 2015. 

We expect the large and small opco clusters to extend the progress shown during 2014 and here 
again the operations will continue to focus on non-voice revenue to drive sustainable growth, which 
is one of the Group's five strategic themes. 
 
In line with our strategic theme to create and manage stakeholder value, we will continue to 
evaluate shareholder returns through our progressive dividend policy of growing dividends by 
between 5% and 15% a year, as well as buying back shares on an opportunistic basis. 
 
We remain committed to creating a distinct customer experience through increasing our 3G and LTE 
coverage and improving network quality and capacity. This is of particular importance in South Africa 
where we will be extending our capex programme significantly. We will continue to expand the 
measurement and use of our customer satisfaction index (via net promoter scores) and tailor-make 
our offerings to enhance our customer experience. 
 
To drive long-term sustainable growth across the Group, we will increase data revenue by 
encouraging uptake through increased smartphone penetration, competitive pricing, bundled 
services and increased speeds.   

The continued rollout of MTN Mobile Money and broader financial services remains a priority with 
the widening of our distribution platform and the introduction of new products and services 
including micro lending, international remittances, retail payments and insurance. We continue to 
develop our digital offering through focusing on local content and working with other suppliers. 
Through our partnership with Rocket Internet AG we now have a platform that facilitates easier 
rollout.  
 
Our enterprise business unit is well placed to provide innovative ICT solutions to corporate and SME 
customers, the public sector and financial services customers. In 2015, we will focus on becoming 
the ICT partner of choice to companies expanding into Africa; to governments seeking to improve 
engagement with their citizens; and to companies aiming to enhance their business offering.   
 
Transforming our operating model through cost optimisation and increasing operational efficiencies 
remains another key strategic theme. Project Next!, our back-office transformation programme, is 
starting to gain traction with the substantial migration of the back office functions in Ghana to the 
Shared Services Hub (SSH) during the year. The programme is planned to be rolled out in another 
two markets in 2015. We will also continue to streamline costs in the distribution network in some 
of our key markets. The commercialisation of MTN's tower infrastructure is a major part of our 
efforts to optimise our network.  
 
Innovation and best practice is another of the Group's strategic themes, and in this respect we aim 
to provide leadership to drive innovation throughout our businesses, capitalising on the 
opportunities we have identified. Linked to this are our efforts to ensure that every MTN operation 
is agile and shares best practices, including efficient go-to-market capabilities, to maintain a 
competitive advantage. 

SANCTIONS 

MTN continues to work closely with all relevant authorities with regards to US and EU sanctions 
against Iran, Syria and Sudan. Our international legal advisors continue to assist the Group in 
remaining compliant with all applicable sanctions.
                                   
LEADING THE DELIVERY OF A "BOLD NEW DIGITAL WORLD" 

We continue working towards our Group vision to lead the delivery of a "bold, new Digital World" to 
our customers. During 2014, we recorded progress on a number of initiatives towards achieving this.  

Voice 

Voice revenue contributed 61,2% to total revenue, a decline of 2,0 percentage points in the year due 
to aggressive price competition and stronger growth in data services. Despite this, MTN remained 
competitive and maintained market share in most key markets.  

Our performance was supported by improving the quality and capacity of our voice networks across 
the Group and a strong focus on improving the customer experience supported by bundled 
offerings, usage-based segmentation and products. During the year, we made good progress in 
rolling out our customer management toolkit, which is an effective way to track each market's 
customer experience metrics.  

Data 

Data services remain the key driver of the Group's revenue growth and increased their contribution 
by 3,8 percentage points to 18,7% of total revenue in 2014. In the year, the number of data users 
increased by 22,8% to 101,2 million as we expanded our 3G and LTE networks and stimulated the 
adoption and usage of data-enabled devices and smartphones. At the end of December, we had 
51,9 million 3G-enabled devices on our network, an increase of 30,4% on the previous year.  

Financial services 

Our mobile financial services continue to gain greater acceptance in the market, providing an 
exciting medium-term opportunity. We are focused on acquiring subscribers as well as increasing 
the volume of transactions and revenue through expanding our distribution base and product range 
to include international remittances, saving, lending and insurance. In 2014, we grew Mobile Money 
subscribers by 50,1% to 22,2 million, led by growth in Ghana, Ivory Coast, Uganda and Benin. 

Digital 

MTN sees a significant opportunity to tap into the digital space on the African continent and in the 
Middle East. Through our investments with Rocket Internet AG in Africa Internet Holdings (AIH) 
(33%) and Middle East Internet Holdings (MEIH) (50%) we are aiming to leverage our brand, 
customer base, distribution network and payment solutions (Mobile Money) in the markets where 
both AIH and MTN are present to deliver a range of internet services including ecommerce retailing, 
as well as market place, taxi, travel, classified and food delivery services. During 2014 AIH launched 
44 new operations across 23 markets in Africa while MEIH has 11 operations in various countries in 
the Middle East providing a strong base for future growth. Furthermore MTN has launched, as part 
of its entertainment strategy, a host of new products and services, including MTN FrontRow, a video- 
on-demand offering, which was launched in December.  

Our investment in the Amadeus IV Digital Prosperity Fund also assists in identifying and evaluating 
digital opportunities. 

ICT 

Our enterprise business unit (EBU) is well placed to becoming the ICT partner of choice to corporate 
and SME, public sector and financial services customers, given our extensive infrastructure with 22 
established operations and 47 data centres across Africa and the Middle East.  

During the year the EBU was centralised under the newly appointed executive, Mteto Nyati. In 
addition, the acquisition of the 50% plus one share in Afrihost Proprietary Ltd (Afrihost), a leading 
internet service provider focused on the SME and corporate segments in South Africa, was 
concluded in November 2014. This, as well as future acquisitions in this space, will be important in 
supporting our ambitions in this area. 

Transforming our operating model 

Cost optimisation remains an important area of focus and has supported our EBITDA margin 
expansion to 44,8%. We rolled out Project Next!  in Ghana in the year, and this is set to launch in 
another two markets in 2015.  

The sale in recent years of our tower infrastructure in a number of countries has allowed MTN to 
move to a more efficient operating environment with improved multi-tenancy and reduced costs. 
During the year, we concluded a transaction whereby MTN Nigeria's passive infrastructure will be 
transferred to an associate company. MTN Group has retained an interest in the newly created 
entity and MTN Nigeria will lease-back the towers for its operations.  

We also concluded previously announced tower deals in Zambia and Rwanda during the year. 

We also took steps to manage costs through our centralised procurement function in Dubai, the 
implementation of network managed services, streamlining of our distribution network and work to 
improve labour productivity across our operations.                                    

FINANCIAL REVIEW  

REVENUE 
Group revenue increased by 6,4% (3,2%*) to R146 154 million despite a 3,9% contraction in the 
South African operation's revenue and declines in the value of the Ghanaian cedi and the Syrian 
pound. Revenue growth was supported by an increase of 12,1% (3,7%*) in MTN Nigeria's revenue 
and weakness in the rand, which had a 3,2% positive impact on revenue. 

The large opco cluster's revenue increased by 7,1% (11,4%*), in line with guidance and supported by 
improved revenue growth in Cameroon of 19,0% (6,9%*), Ghana of -13,5% (13,8%*), Syria of 6,8% 
(25,9%*) and Sudan of 8,2% (16,4%*). MTN operations in Zambia, Benin, Congo-Brazzaville and 
Cyprus supported the constant currency performance of the small opco cluster. 
 
Movements in some of the Group's major operational currencies positively impacted Group 
performance. The rand weakened against the US dollar by 12,6% in the year, with a resultant 
average rate to the US dollar of 10,87 at end December 2014. Furthermore, the rand weakened by 
7,2% against the Nigerian naira, 6,4% against the Iranian rial and strengthened by 28,6% against the 
Ghanaian cedi and by 13,7% against the Syrian pound. 
 
Outgoing voice revenue increased by 3,0% (-0,9%*) compared to the prior year and contributed 
61,2% to total revenue. Performance was negatively affected by price competition in key markets 
resulting in lower voice tariffs, particularly in South Africa. Across our operations, average price per 
minute (APPM) declined by 12,1% in US dollar terms. 
 
Group data revenue (excluding SMS) increased by 33,2% (30,9%*), supported by an expanded 3G 
network, strong growth in data usage and an increase in the number of smartphones and 3G-
enabled devices in our markets. Data's contribution to total revenue was 18,7%, 3,8 percentage 
points higher than in the previous year. MTN South Africa and MTN Nigeria were the largest 
contributors, together accounting for 70,7% of MTN Group's total data revenue. The majority of 
operations in both the large opco and small opco cluster also delivered good data revenue growth. 
 
Group interconnect revenue declined by 2,9% (5,9%*) following cuts in termination rates in our 
Nigerian and South African operations. These came into effect in April and May respectively.  
 
EBITDA 
Group earnings before interest, taxation, depreciation and amortisation and goodwill impairment 
(EBITDA) increased by 10,2% (5,3%*) to R65 520 million. The Group EBITDA margin expanded by 1,5 
percentage points (pp) to 44,8%, benefiting from cost-containment initiatives throughout the Group. 
We continued to optimise our distribution costs, inclusive of service provider and other commissions 
and marketing costs. 
 
The Group's EBITDA margin was supported by increased margins in Uganda (3,3pp), Syria (1,5pp) 
and Sudan (2,1pp). MTN South Africa's EBITDA margin remained under pressure and contracted 2,6 
pp. 
 
DEPRECIATION AND AMORTISATION 

Depreciation increased by 10,1% (5,3%*) to R18 124 million as a result of higher capex spend in 
previous years. Amortisation costs increased by 14,6% (10.0%*), driven by increased spending on 
software in Nigeria, Uganda and Cameroon. 

NET FINANCE COSTS 

Net finance costs of R3 606 million increased sharply from the R1 234 million recorded in the 
comparable period in the prior year. This was largely due to foreign currency losses in 2014 of 
R1 091 million which were mainly the result of:  

    -  Mauritius functional currency gains of R337 million. 
    -  Nigeria forex losses of R713 million incurred on US dollar borrowings and as a result of the 
       devaluation of the naira. 
    -  Ghana forex losses of R155 million as a result of the depreciation of the cedi.  
    -  Dubai forex losses of R249 million, of which R144 million relates to a realised net forex loss 
       on dividends received. 

TAXATION 

The Group's absolute taxation charge increased by 12,4% (7,0%*) to R13 780 million and the 
effective tax rate increased to 31,1% from 29,1%. The increase is largely due to withholding tax 
payable as a result of increased dividend upstreaming, the lower investment allowance deductions 
resulting from lower capex additions in Nigeria as well as handset adjustments due to the voluntary 
change in accounting policy relating to revenue recognition in South Africa. 

EARNINGS 

Basic headline earnings per share (HEPS) increased by 8,9%** to 1 536 cents** and attributable 
earnings per share (EPS) increased by 20,0%** to 1 752 cents**.  

CASHFLOW 

Cash inflows generated by operations increased by 8,2%** to R64 628 million**. This was mostly 
offset by a 25,6%** increase in dividends paid of R5 058 million**, resulting in a net 0,4%** increase 
in cash generated by operating activities to R27 132 million**.  

CAPITAL EXPENDITURE 

Capex decreased by 16,3% (18,0%*) to R25 242 million, of which R517 million related to foreign 
currency movements. 

FINANCIAL POSITION 

The Group reported net debt of R4 543 million** at the end of 2014, compared to net debt of 
R352 million** at 31 December 2013. This increase was due to the Group dividend payment of 
R20 527 million** during the year and the raising of a $750 million Eurobond debt in Mauritius. This 
excludes R6 825 million (49%) of net cash in MTN Irancell, which is accounted for on an equity basis. 

BUSINESS COMBINATIONS/ACQUISITION OF JOINT VENTURES 

IHS Holding Limited (IHS) 
Aligned to our strategic initiatives around towers we have acquired a stake in an African 
infrastructure holding company, IHS, for a consideration of R5 420 million**.  
 
Middle East Internet Holdings S.A.R.L (MEIH) 
The Group and Rocket Internet AG (Rocket) have formed a joint venture, MEIH, to develop internet 
businesses in the Middle East, with the Group and Rocket each being 50% shareholders. The Group 
invested €120 million in the joint venture. 

Africa Internet Holdings Gmbh (AIH) 
The Group has acquired 33,3% of AIH  for €168 million, a joint venture between Rocket and Millicom 
International Cellular, to develop internet businesses in Africa. The Group, Millicom International 
Cellular and Rocket have each become 33,3% shareholders in AIH. 
 
Nashua 
In November 2014, the Group acquired its Nashua Mobile subscriber base from Nashua Mobile 
Proprietary Limited for R1 246 million. The acquisition of the subscriber base will enable the Group 
to consolidate the MTN post-paid subscriber base into one entity and own the relationship with the 
subscribers.  
 
Afrihost 
In November 2014, the Group acquired 50% plus one share of Afrihost for R408 million, thereby 
obtaining control of Afrihost.    

OPERATIONAL REVIEW 

SOUTH AFRICA 

-  Reported revenue declined by 3,9% 
-  Data revenue increased 7,0% 
-  EBITDA margin declined 2,6 percentage points to 32,1% 

MTN South Africa delivered clear evidence of a turnaround in the second half of the year and in the 
fourth quarter EBITDA increased 28,1% quarter on quarter. This was achieved despite a challenging 
consumer environment. The operation increased its subscriber base by 8,9% to 28,0 million, 
reporting 2,7 million net additions in the second half versus the 430 496 net disconnections 
recorded in the first half of the year. This was largely a result of segmented offerings based on 
usage, limited duration on-net promotions such as WOW and below-the-line advertising campaigns 
in the pre-paid segment. As a result, the pre-paid subscriber base increased by 9,1% to 22,6 million. 
The post-paid segment delivered a significantly improved performance, reporting net subscriber 
additions of 414 251 for the year. This was supported by a variety of revised offers. 

Total revenue declined by 3,9% to R38 922 million. This was mainly a result of a 36,0% decline in 
interconnect revenue due to lower mobile termination rates (MTRs). While data revenue only 
increased 7,0% there was a meaningful improvement in the fourth quarter with mobile data revenue 
growth of 17% when compared to the same period last year. Fourth quarter 2014 on third quarter 
2014 mobile data revenue growth was 42,3%. Increased 3G coverage, improved smartphone 
adoption and tailored data bundles were the main contributors to this growth. By year-end, data 
revenue contributed 23,8% of total revenue from 21,4% in 2013. The number of smartphones on 
MTN's network increased by 17,8% to 5,9 million, and the number of data users increased by 20,1% 
to 17,1 million.  
 
The EBITDA margin declined by 2,6 percentage points largely as a result of lower interconnect 
revenue, now a net payer, and increased provisions for impairment of trade receivables amounting 
to R616 million from R289 million in the previous year. Stricter credit criteria have been 
implemented to ensure this level of bad debts does not reoccur. MTN South Africa continues to 
focus on improving profitability throughout the business and on various cost efficiencies, including 
managed services and optimising the distribution network.  
 
Capex for the period of R5 676 million was slightly lower than budget due to improved procurement 
processes. During the year, we added 520 new 2G sites and 904 3G sites. The 3G population 
coverage improved to 87%. As a result of improved performance in the second half (with voice 
traffic volumes up 31,0% year on year and growing demand for data), we will increase capex 
significantly in 2015. This will be focused on improving the quality and capacity of the 2G and 3G 
network and rolling out LTE. 
 
We continue to have discussions with the authorities regarding the planned auction of 2.6 GHz and 
3.5 GHz spectrum frequency and allocations. 

NIGERIA 

-  Net subscriber additions of 3,1 million 
-  Revenue increased 3,7%* 
-  Interconnect revenue up 14,1%* 
-  EBITDA margin of 58,6% 
-  Capex of R8 375 million, with 1 367 new 2G sites and 2 365 co-located 3G sites added 

MTN Nigeria grew its subscriber base by 5,5% in 2014, increasing total subscribers to 59,9 million. 
This was a satisfactory performance given regulatory restrictions relating to the regulator's 2013 
ruling that declared MTN Nigeria a 'dominant operator'. Performance was underpinned by improved 
segmented offerings to high-value customers and seasonal promotions aimed at growing subscribers 
and increasing usage. The operation reported 1,5 million net additions in the last quarter following 
regulatory approval of select promotional offerings from October 2014 onwards.  

Total revenue increased by 12,1% or 3,7% in constant-currency terms, below expectations, although 
MTN's revenue market share remained stable. Growth in revenue was impacted by a decline in on-
net traffic due to the dominance ruling and lower-than-anticipated subscriber numbers. Data 
revenue continued to grow strongly, increasing by 28,3%* to contribute 18,6% of total revenue at 
year end. This was mainly a result of the 18,1% increase in data users, increased smartphone 
penetration and the introduction of products such as the 4.5G smartphone data plan.  
 
The number of smartphones on the network increased by 51,2% to 9,3 million at the end of 
December. We worked hard to improve data usage through offering innovative products and 
bundled packages including MTN SME Plus, MTN Biz Plus, MTN Music+, MTN Callertunez, while 
harnessing e-commerce and financial service opportunities with our online shop Jumia. MTN 
Nigeria's Mobile Money offering, Diamond Yellow, gained encouraging momentum and we are now 
exploring ways to expand the offering.  
 
The EBITDA margin increased by 1,6 percentage points to 58,6% on a like-for-like basis (excluding 
the reversal of the management fee in 2013). This was supported by cost-optimisation initiatives, 
including a revised commission structure and managed services implemented during the year. In 
December, costs were affected by the sale of MTN Nigeria's towers to the tower company and the 
subsequent lease expenses incurred. This follows the conclusion of arrangements in quarter four to 
transfer tower assets to a new entity that will be managed by the telecoms infrastructure provider 
IHS. A total of 9 132 towers will be transferred by June 2015 of which 4 154 were transferred in 
2014.  

During the year, MTN Nigeria's capital expenditure was aimed at meeting the growing demand for 
data. We rolled out 1 367 new 2G sites and 2 365 co-located 3G sites, spending R8 375 million. 
Although capex declined by 41,4% in the year, sufficient quality and headroom has been achieved on 
the network and the operation has the flexibility to rapidly roll out as required. 
 
To ensure compliance with regulations, MTN Nigeria rigorously monitors the KPIs set by the Nigerian 
Communications Commission.  

IRANCELL (Joint venture, equity accounted) 

-  Subscribers increased 6,2% to 43,9 million 
-  Revenue increased 14,3%* 
-  Data revenue increased 96,3%* 
-  Maintained EBITDA margin at 42,8% 
     
MTN Irancell delivered a good performance, increasing its subscriber base by 6,2% to 43,9 million. 
This was largely supported by segmented product offerings, successful subscriber acquisition 
campaigns, focused churn management as well as the launch of 3G services. 

Total revenue increased by 14,3%* compared to the prior year, supported by improved distribution 
in Tehran and four other major cities, a high uptake of bolt-on packages and the expansion of the 3G 
network and value-added services. The operation was awarded a 3G and LTE licence in August, 
which significantly enhanced data revenue in the fourth quarter. Data revenue increased by 96,3%* 
and now contributes 17,6% of total revenue. MTN Irancell now has 17,3 million active smartphones 
on its network and 15,1 million data users. On 22 December 2014 the regulator passed a resolution 
setting the maximum tariff for data at 0.5 Iranian rial (IRR) per KB for post-paid and 0.75 IRR per KB 
for pre-paid customers.  

MTN Irancell maintained its EBITDA margin at 42,8%, supported by the management of cost 
increases to below the rate of inflation. 

MTN Irancell invested R6 350 million (100%) of capex during the year. It rolled out 621 LTE sites and 
2 151 3G sites to support the launch of 3G services.  

LARGE OPCO CLUSTER 

-  Subscribers increased 8,9% to 56,7 million 
-  Revenue increased 11,4%* 
-  Data revenue increased 74,4%* 
-  EBITDA margin expanded 0,6 percentage points to 36,7% 

MTN Ghana's performance was pleasing despite a weak macro-economic environment and tough 
competition. We increased subscriber numbers by 7,1% to 13,9 million and maintained our market 
share at 50,5%. Price adjustments in the second half supported improvements in traffic and net 
additions. 
 
Total revenue increased by 13,8%*, supported by voice and a 123,0%* growth in data revenue. Data 
contributed 18,8% to total revenue, underpinned by a meaningful increase in data users to 
approximately 8 million. The strong growth in data was a result of improved 3G coverage, reduced 
data prices and a significant uptake of digital services. MTN Mobile Money delivered a strong 
performance with 3,4 million registered MTN Mobile Money customers.   

MTN Ghana continues to focus on cost optimisation as the weakening of the cedi against the US 
dollar has resulted in significant pressure on fuel costs and other US dollar-denominated expenses. 

Despite this, MTN Ghana's EBITDA margin remained relatively flat at 37,4%, largely supported by the 
expiration of the management fee agreement on 31 March 2014.  

During the year, MTN Ghana invested R1 400 million in the network, adding 112 3G sites and 
64 2G sites. 

MTN Cameroon delivered a solid performance, increasing its subscribers by 10,9% to 9,7 million. On 
31 December, the internal alignment of the subscriber reporting methodology resulted in the 
restatement of subscriber numbers to 9,7 million, a reduction of 1,6 million subscribers. Despite this, 
the operation maintained its leadership position with market share at 59,4%. 

Total revenue increased by 6,9%*, supported by segmented voice and data offers focused on high-
value customers and youth. This included the successful launch of new value propositions such as 
MTN Hyper Booster to stimulate on-net usage and data adoption. Data revenue increased by 
35,4%*, contributing 8,1% to total revenue. This was a good performance despite the commercial 
launch of a third mobile operator in September 2014 with an exclusive 3G licence. MTN Cameroon is 
in negotiations with the regulator to receive a 3G licence in the first half of 2015. The operation 
ended the year with 1,6 million registered MTN Mobile Money customers and continued to focus on 
increasing its active subscribers and transaction volumes.  

MTN Cameroon's EBITDA margin increased by 0,2 percentage points to 42,8% despite higher lease 
rental costs following the tower transaction.  

Capex amounted to R862 million. During the year, we rolled out 125 new sites in advance of the 3G 
licence and made improvements to the quality and capacity of high traffic sites in the main cities.  

MTN Ivory Coast delivered a strong performance despite tough competition. Subscribers increased 
by 13,3% to 8 million and market share increased 1,3 percentage points to 39,2%.  

Total revenue increased by 5,1%*, supported by growth in data revenue. Competitive tariffs, below-
the-line offers and value-added services accelerated this growth trend. Data revenue increased by 
33,7%* and now contributes 11,2% of total revenue. Total data users increased 4,4% year on year to 
1,7 million. This was significantly boosted by the first 3G sites coming on air in the country.  
 
We showed good progress with MTN Mobile Money, increasing registered subscribers by 74,3% to 
2,6 million at the end of December. This was underpinned by bonus promotions on airtime and 
remittances between Ivory Coast and Burkina Faso.  
 
The operation's EBITDA margin declined by 2,3 percentage points to 38,6%. Tough cost controls 
mitigated the impact of leasing costs from the tower company and the new 2% levy on revenue. 
MTN Ivory Coast spent R1 185 million on its capex programme, with a strong focus on 3G and fibre. 
During the year, we rolled out 252 2G sites and 105 co-located 3G sites. 
 
MTN Uganda increased its subscriber base by 18,0% to 10,4 million, driven by bundled voice 
products, improved 3G coverage and increased take up of MTN Mobile Money. We increased our 
market share to 56,8% despite operating in a highly competitive market made up of six operators. 

Total revenue increased by 6,8%*, supported by a 36,6 %* increase in data revenue. By year end, 
data contributed 24,7% to total revenue. Data trends were supported by value-added services and 
enhanced marketing. There remains significant opportunity for increased 3G penetration in the 
country. 

MTN Mobile Money continued to perform well and recorded a 40,9% increase in registered 
subscribers to 7,3 million. Usage was stimulated by a wider mobile payment product range and a 
new enhanced technology platform. 

MTN Uganda's EBITDA margin increased by 3,3 percentage points to 39,2% thanks to strong cost 
control.  

Capex in the year amounted to R667 million, with 157 new 2G sites and 140 co-located 3G sites 
rolled out, improving quality and capacity on the network. 

MTN Syria recorded a marginal increase in subscribers to 5,9 million in a very challenging operating 
environment. Total revenue increased 25,9%* and data revenue continued to gather pace, 
increasing by 108,3%*.  

Despite high inflation, MTN Syria's EBITDA margin grew by 1,5 percentage points to 18,9%. The 
operation's performance will remain under pressure until the crisis in the country is resolved. Some 
of the key challenges remain security, transmission, power outages and insufficient fuel supply. 
Shortly after year-end, in January 2015, MTN Syria was awarded a long-term freehold licence by the 
Syrian authorities, to December 2034. This replaces the previous build, operate and transfer 
arrangement.  

MTN Sudan increased subscribers by 2,6% to 9 million, in a weak economy and faced with subscriber 
registration requirements. Revenue increased by 16,4%* and data revenue increased by 136,4%*, 
contributing 15,4% to total revenue. The growth in data was mainly attributable to attractive data 
bundles. The EBITDA margin expanded by 2,1 percentage points to 33,8 % despite steep inflation. 
Capex in the year amounted to R1 392 million. 

SMALL OPCO CLUSTER 

-  Subscribers increased 9,3% to 34,8 million 
-  Revenue increased 4,3%* 
-  Data revenue increased 90,7%* 
-  EBITDA margin increased 2,1 percentage points to 36,1%   

The small opco cluster showed satisfactory revenue growth of 4,3%* despite a tough operating 
environment impacted by the decline of oil prices and Ebola particularly in West Africa. Revenue was 
supported by solid growth in Zambia, Benin, Cyprus and Congo-Brazzaville, with Liberia showing 
encouraging signs towards year end. Data revenue increased 90,7%*. This was supported by good 
growth in Mobile Money which recorded 5,8 million subscribers in 8 countries at the end of 
December 2014. 

The EBITDA margin showed encouraging expansion of 2,1 percentage points to 36,1%. This was
mainly attributable to a strong focus on cost containment and the benefit from centralised
procurement.

Capex for the year amounted to R3 888 million with 473 2G and 540 co-located 3G sites added in the
year.

ANNEXURE

Pro forma financial information for the year ended 31 December: 
   
                                        (1)       (2)                                   (1)       (2)
                                                            Actual    
                                                         2014 excl    
                                                            hyper-                                         Actual
                                     Hyper-             inflation,                                      2013 excl
                                  inflation               goodwill                                         hyper-
                                        and             impairment                                      inflation
                                   goodwill                    and                                            and
                          Actual    impair-     Tower        tower       Actual      Hyper-     Tower       tower
                            2014       ment    profit       profit         2013   inflation    profit      profit
Revenue                  146 930        776         –      146 154      137 270           –         –     137 270
Other income               7 928          –     7 430          498        1 327           –       968         359
EBITDA                    73 191        241     7 430       65 520       60 430           –       968      59 462
Depreciation,      
amortisation and      
impairment      
of goodwill              23 546       2 191         –       21 355       19 278           –         –      19 278
Profit from operations   49 645     (1 950)     7 430       44 165       41 152           –       968      40 184
Net finance cost          3 668          62         –        3 606        1 234           –         –       1 234
Net monetary gain           878         878         –            –            –           –         –           –
Equity income             4 208         529         –        3 679        3 431         318         –       3 113
Profit before tax        51 063       (605)     7 430       44 238       43 349         318       968      42 063
Income tax expense       13 361           7     (426)       13 780       12 487           –       226      12 261
Profit after tax         37 702       (612)     7 856       30 458       30 862         318       742      29 802
Non-controlling      
interests                 5 623         161     1 586        3 876        4 111           –       193       3 918
Attributable profit      32 079       (773)     6 270       26 582       26 751         318       549      25 884
EBITDA margin             49,8%                              44,8%        44,0%                             43,3%
Effective tax rate        26,2%                              31,1%        28,8%                             29,1%

    1) Represents the exclusion of the hyperinflation impact of certain of the Group's subsidiaries
       (MTN Sudan and MTN Syria) and the Group's joint venture in Iran, being accounted for on a
       hyperinflationary basis in accordance with IFRS on the respective financial statement line
       items affected.

        In addition, the goodwill impairment charge amounting to R2 033 million, accounted for in
        accordance with IFRS, has been adjusted for in the "Depreciation, amortisation and
        impairment of goodwill" line.

    2) Represents the exclusion of the financial impact relating to the sale of tower assets during
       the financial year on the respective financial line items impacted, which include:
       Tower sale profits for Nigeria R7 329 million, Zambia R48 million, Rwanda R2 million, Ghana
       R20 million and the release of a deferred gain of R31 million (2013: Cameroon R335 million,
       Ivory Coast R574 million, Ghana R21 million and the release of a deferred gain of R38
       million) and the relating tax impact of R426 million (2013: R226 million).

As the Group will continue in its strategy to monetise its passive infrastructure, similar tower sale
transactions may continue going forward. In addition, the impact of hyperinflation on the Group's
results will continue for as long as Syria, Sudan and Iran are considered to be hyperinflationary
economies.

SUBSCRIBER NET ADDITION GUIDANCE FOR 2015                                  

                                 '000                       

South Africa                      2 400               

Nigeria                           4 750                      

Large opco cluster                 7 100 

Iran                             1 750                      

Ghana                            1 100                      

Cameroon                          1 500               

Ivory Coast                       800                        

Sudan                            750                        

Syria                            0                   

Uganda                            1 200                      

Small opco cluster                 3 250                      

Total                            17 500                       

Any forward-looking information contained in this announcement has not been audited or reported 
on/reviewed by the Company's external auditors. 

Declaration of final ordinary dividend 

Notice is hereby given that a gross year-end dividend of 800 cents per share for the period to 31 December 
2014 has been declared payable to MTN shareholders. The number of ordinary shares in issue at the date of 
this declaration is 1 847 410 539 (including 10 704 475 treasury shares). 
 
The dividend will be subject to a maximum local dividend tax rate of 15% which will result in a net dividend of 
680 cents per share to those shareholders that bear the maximum rate of dividend withholding tax of 120 
cents per share. No STC credits are available for utilisation. The net dividend per share for the respective 
categories of shareholders for the different dividend tax rates is as follows: 
 
0%          800 cents per share    
5%          760 cents per share    
7.5%        740 cents per share    
10%         720 cents per share    
12.5%       700 cents per share    
15%         680 cents per share    
 
These different dividend tax rates are a result of the application of tax rates in various double taxation 
agreements as well as exemptions from dividend tax. 
 
MTN Group Limited's tax reference number is 9692/942/71/8. In compliance with the requirements of Strate, 
the electronic settlement and custody system used by the JSE Limited, the salient dates relating to the 
payment of the dividend are as follows: 
 
Last day to trade cum dividend on the JSE                    Friday, 20 March 2015  
First trading day ex dividend on the JSE                      Monday, 23 March 2015  
Record date                                                         Friday, 27 March 2015  
Payment date                                                          Monday,  30 March 2015  

No share certificates may be dematerialised or re-materialised between Monday, 23 March 2015 and Friday, 
27 March 2015, both days inclusive. On Monday, 30 March 2015, the dividend will be transferred electronically 
to the bank accounts of certificated shareholders who make use of this facility. 
 
In respect of those who do not use this facility, cheques dated Monday, 30 March 2015 will be posted on or 
about that date. Shareholders who hold dematerialised shares will have their accounts held by the Central 
Securities Depository Participant or broker credited on Monday, 30 March 2015. 
 
The MTN Board confirms that the Group will satisfy the solvency and liquidity test immediately after 
completion of the dividend distribution. 
 
PRELIMINARY AUDITED SUMMARY CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS IN ACCORDANCE WITH INTERNATIONAL
FINANCIAL REPORTING STANDARDS ("IFRS")

The Group's preliminary audited summary consolidated annual financial statements have been
independently audited by the Group's external auditors. The preparation of the Group's preliminary
audited summary consolidated annual financial statements was supervised by the Group chief financial
officer, BD Goschen, BCom, BCompt (Hons), CA(SA).

The results were made available on 4 March 2015.

Summary consolidated
income statement
for the year ended 31 December

                                                                         2014    2013(a)
                                                              Note         Rm         Rm
Revenue                                                               146 930    137 270
Other income                                                            7 928      1 327
Direct network operating costs                                       (21 604)   (18 299)
Costs of handsets and other accessories                              (11 957)   (10 744)
Interconnect and roaming                                             (13 653)   (13 816)
Staff costs                                                           (8 838)    (8 670)
Selling, distribution and marketing expenses                         (15 531)   (16 362)
Other operating expenses                                             (10 084)   (10 276)
EBITDA                                                                 73 191     60 430
Depreciation of property, plant and equipment                        (18 262)   (16 458)
Amortisation of intangible assets                                     (3 251)    (2 820)
Impairment of goodwill                                                (2 033)          –
Operating profit                                                       49 645     41 152
Net finance costs                                                     (3 668)    (1 234)
Net monetary gain                                                         878          –
Share of results of joint ventures and associates after tax     9       4 208      3 431
Profit before tax                                                      51 063     43 349
Income tax expense                                                   (13 361)   (12 487)
Profit after tax                                                       37 702     30 862
Attributable to: 
Equity holders of the Company                                          32 079     26 751
Non-controlling interests                                               5 623      4 111
                                                                       37 702     30 862
Basic earnings per share (cents)                                8       1 752      1 460
Diluted earnings per share (cents)                              8       1 742      1 452

(a) 2013 amounts restated, refer to notes 5 and 18.

Summary consolidated statement
of comprehensive income
for the year ended 31 December
                                                                         2014   2013(a)
                                                                           Rm        Rm
Profit after tax                                                       37 702    30 862
Other comprehensive income after tax: 
Exchange differences on translating foreign operations including 
the effect of hyperinflation¤                                           2 968    11 078
Equity holders of the Company                                           2 960    10 179
Non-controlling interests                                                   8       899
 
Total comprehensive income                                             40 670    41 940
Attributable to: 
Equity holders of the Company                                          35 039    36 930
Non-controlling interests                                               5 631     5 010
                                                                       40 670    41 940

¤   This component of other comprehensive income does not attract any tax and may subsequently be reclassified to profit or loss.
(a) 2013 amounts restated, refer to notes 5 and 18.

Summary consolidated statement
of financial position
as at
                                                           31 December   31 December   1 January
                                                                  2014       2013(a)       2013(a)
                                                    Note            Rm            Rm          Rm
Non-current assets                                             163 218       153 083     127 365
Property, plant and equipment                                   87 546        92 903      73 905
Intangible assets and goodwill                                  36 618        37 751      32 594
Investment in joint ventures and associates                     25 514        12 643      10 208
Deferred tax and other non-current assets                       13 540         9 786      10 658
Current assets                                                  90 467        76 573      56 465
Non-current assets held for sale                      15         3 848         1 281       1 373
                                                                86 619        75 292      55 092
Other current assets                                            42 628        33 470      27 112
Restricted cash                                                    893         2 222       5 272
Cash and cash equivalents                                       43 098        39 600      22 708

Total assets                                                   253 685       229 656     183 830
Total equity                                                   133 442       121 812     100 029
Attributable to equity holders of the Company                  128 517       116 479      96 148
Non-controlling interests                                        4 925         5 333       3 881
Non-current liabilities                                         52 613        49 860      33 327
Interest-bearing liabilities                         13         39 470        34 664      21 322
Deferred tax and other non-current liabilities                  13 143        15 196      12 005
Current liabilities                                             67 630        57 984      50 474
Interest-bearing liabilities                         13         13 809        11 361      10 762
Other current liabilities                                       53 821        46 623      39 712
Total equity and liabilities                                   253 685       229 656     183 830

(a) 2013 amounts restated, refer to notes 5 and 18.

Summary consolidated statement
of changes in equity
for the year ended 31 December
                                                                   2014     2013(a)
                                                        Note         Rm          Rm
Opening balance at 1 January                                    116 479      94 569
Restatement for voluntary change in accounting policy   5, 18         –       1 579
Restated balance at 1 January                                   116 479      96 148
Shares issued during the year                                         3           5
Shares cancelled                                                    (^)         (^)
Share buy-back                                                  (2 422)           –
Transactions with non-controlling interests                           –       (495)
Share-based payment transactions                                    110         215
Settlement of vested equity rights                                (209)           –
Total comprehensive income                                       35 039      36 930
    Profit after tax                                             32 079      26 751
    Other comprehensive income after tax                          2 960      10 179
Dividends declared                                             (20 527)    (16 210)
Other movements                                                      44       (114)
Attributable to equity holders of the Company                   128 517     116 479
Non-controlling interests                                         4 925       5 333
Closing balance at 31 December                                  133 442     121 812
Dividends declared during the year (cents per share)              1 110         873
Dividends declared after year end (cents per share)                 800         665

^   Amount less than R1 million.
(a) 2013 amounts restated, refer to notes 5 and 18.

Summary consolidated statement
of cash flows
for the year ended 31 December
                                                                   2014       2013
                                                                     Rm         Rm
Net cash generated from operating activities                     27 132     27 025
Cash generated by operations                                     64 628     59 708
Dividends paid to equity holders of the Company                (20 527)   (16 187)
Other operating activities                                     (16 969)   (16 496)
Net cash used in investing activities                          (25 991)   (19 835)
Acquisition of property, plant and equipment                   (19 562)   (24 568)
Movement in investments and other investing activities          (6 429)      4 733
Net cash from financing activities                                2 639      6 264
Net increase in cash and cash equivalents                         3 780     13 454
Cash and cash equivalents at beginning of the year               39 577     22 539
Exchange (losses)/gains on cash and cash equivalents              (182)      3 584
Net monetary loss on cash and cash equivalents                    (103)          –
Cash and cash equivalents at end of the year                     43 072     39 577

Notes to the summary consolidated
financial statements (continued)
for the year ended 31 December

1.  INDEPENDENT AUDIT
    The summary consolidated annual financial statements have been derived from the audited consolidated
    annual financial statements. The directors of the Company take full responsibility for the preparation of
    the summary consolidated annual financial statements and that the financial information has been
    correctly derived from the underlying audited consolidated annual financial statements. The summary
    consolidated annual financial statements for the year ended 31 December 2014 have been audited
    by our joint auditors PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Inc., who expressed an
    unmodified opinion thereon. The auditors also expressed an unmodified opinion on the consolidated
    annual financial statements from which these summary consolidated annual financial statements were
    derived. A copy of the auditors' report on the summary consolidated annual financial statements and of
    the auditors' report on the consolidated annual financial statements are available for inspection at the
    Company's registered office, together with the financial statements identified in the respective auditors'
    reports.

2.  GENERAL INFORMATION
    MTN Group Limited ("the Company") carries on the business of investing in the telecommunications
    industry through its subsidiary companies, joint ventures and associates.

3.  BASIS OF PREPARATION
    The summary consolidated annual financial statements are prepared in accordance with the
    requirements of the JSE Limited Listings Requirements for preliminary reports and the requirements
    of the Companies Act applicable to summary financial statements. The Listings Requirements require
    preliminary reports to be prepared in accordance with the framework concepts, the measurement and
    recognition requirements of IFRS, the SAICA Financial Reporting Guides as issued by the Accounting
    Practices Committee, financial pronouncements as issued by the Financial Reporting Standards Council
    (FRSC), and must also, as a minimum, contain the information required by IAS 34 Interim Financial
    Reporting. These summary consolidated annual financial statements should be read in conjunction
    with the annual financial statements for the year ended 31 December 2014, which have been prepared
    in accordance with IFRS. A copy of the full set of the audited consolidated annual financial statements
    is available for inspection from the Company secretary at the registered office of the Company.

4.  PRINCIPAL ACCOUNTING POLICIES
    The Group has adopted all the new, revised or amended accounting pronouncements as issued by the
    IASB which were effective for the Group from 1 January 2014, none of which had a material impact on
    the Group.

    The accounting policies applied in the preparation of the consolidated annual financial statements from
    which the summary consolidated annual financial statements were derived are in terms of IFRS and
    are consistent with those accounting policies applied in the preparation of the previous consolidated
    annual financial statements, with the exception of the voluntary change in accounting policy in respect
    of revenue recognition (notes 5 and 18).

5.  VOLUNTARY CHANGE IN ACCOUNTING POLICY
    IAS 18 Revenue
    Previously, the Group accounted for arrangements with multiple deliverables (i.e. multiple element
    revenue arrangements) by dividing these arrangements into separate units of accounting and recognising
    revenue through the application of the residual value method.

    During the year under review, the Group resolved to change its accounting policy in recognising revenue
    relating to these arrangements from applying the residual value method to the relative fair value method.
    This change was effected by the Group on a voluntary basis.

    Previously under the residual value method, fair value was ascribed to each of the undelivered elements
    (typically the service contract) and any consideration remaining (after reducing the total consideration
    of the arrangement with the fair value of the undelivered elements) was allocated to the delivered
    element(s) in the transaction (typically the handset). This resulted in limited amounts of revenue being
    allocated to the elements delivered upfront (i.e. the handset). Under the relative fair value method, the
    consideration received or receivable is allocated to each of the elements (delivered and undelivered)
    according to the relative fair value of the elements included in the arrangement.

    The Group believes that the change results in more relevant and reliable information being presented
    in respect of revenue recognised in relation to multiple element revenue arrangements, as revenue
    is now being recognised in relation to each of the elements delivered and to be delivered based on
    the relative fair value of the relating elements in relation to the total consideration received or receivable.
    The new accounting policy also results in an improved correlation between the recognition of revenue
    and associated costs and also aligns the Group's policy more closely with the requirements of IFRS 15
    Revenue from Contracts with Customers which is effective for periods commencing on 1 January 2017.
   
    As required in terms of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the change
    in accounting policy was applied retrospectively which resulted in an increase in revenue, other operating
    and income tax expenses, trade and other receivables, non-current loans and other receivables, equity
    and deferred tax liabilities in prior years. The impact on the Group's financial results and position is
    disclosed in note 18.

6.  FINANCIAL INSTRUMENTS
    The carrying amounts of all financial instruments measured at amortised cost closely approximate fair
    value.

7.  SEGMENT ANALYSIS
    The Group has identified reportable segments that are used by the Group executive committee (chief operating
    decision maker ("CODM")) to make key operating decisions, allocate resources and assess performance.
    
    The reportable segments are geographically differentiated regions and grouped by their relative size.

    Operating results are reported and reviewed regularly by the Group executive committee and include
    items directly attributable to a segment as well as those that are attributed on a reasonable basis, whether
    from external transactions or from transactions with other Group segments. EBITDA is used as a measure
    of reporting profit or loss for each segment.

    During the year under review, the Group executive committee resolved to review segment results on
    a basis excluding profits realised in respect of the sale of towers during the respective financial year.
    In addition, Irancell Telecommunication Company Services (PJSC), which previously formed part of the
    large opco cluster in terms of the segmental presentation of financial results, is now presented to the
    Group executive committee on a standalone basis. Due to the change in the segment information
    presented to the Group executive committee during the current financial year, the comparatives were
    adjusted accordingly.
 
                                                                     2014        2013(a)
                                                                       Rm             Rm
    REVENUE                         
    South Africa                                                   38 922         40 482
    Nigeria                                                        53 995         48 159
    Large opco cluster                                             31 200         29 145
    Ghana                                                           7 149          8 269
    Cameroon                                                        6 194          5 204
    Ivory Coast                                                     6 418          5 480
    Uganda                                                          5 289          4 467
    Syria»                                                          3 449          3 229
    Sudan»                                                          2 701          2 496
    Small opco cluster                                             22 385         19 804
    Major joint venture – Iran¶                                    11 631          9 514
    Head office companies and eliminations                          (348)          (320)
    Hyperinflation impact                                             776              –
    Iran revenue exclusion¶                                      (11 631)        (9 514)
                                                                  146 930        137 270

    ¶   Irancell Telecommunication Company Services (PJSC) proportionate revenue is included in the segment analysis as reviewed
        by the CODM and excluded from IFRS reported revenue due to equity accounting for joint ventures and excludes the impact of
        hyperinflation of R1 655 million (December 2013: R1 714 million).
    »   Excludes the impact of hyperinflation of: Syria R434 million (December 2013: Nil), Sudan R342 million (December 2013: Nil).
    (a) 2013 amounts restated, refer to notes 5 and 18.

                                                                     2014        2013(a)
                                                                       Rm             Rm
    EBITDA    
    South Africa                                                   12 509         14 067
    Nigeria                                                        31 620         29 235
    Large opco cluster                                             11 439         10 512
    Ghana                                                           2 674          3 102
    Cameroon                                                        2 651          2 215
    Ivory Coast                                                     2 475          2 239
    Uganda                                                          2 074          1 603
    Syria»                                                            651            561
    Sudan»                                                            914            792
    Small opco cluster                                              8 083          6 732
    Major joint venture – Iran¶                                     4 982          4 075
    Head office companies and eliminations                          1 869        (1 084)
    Hyperinflation impact                                             241              –
    Tower sale profits®                                             7 430            968
    Iran EBITDA exclusion¶                                        (4 982)        (4 075)
    EBITDA                                                         73 191         60 430
    Depreciation, amortisation and impairment of goodwill        (23 546)       (19 278)
    Net finance cost                                              (3 668)        (1 234)
    Net monetary gain                                                 878              –
    Share of results of joint ventures and associates after tax     4 208          3 431
    Profit before tax                                              51 063         43 349

    ¶    Irancell Telecommunication Company Services (PJSC) proportionate EBITDA is included in the segment analysis as reviewed by
         the CODM and excluded from IFRS reported EBITDA due to equity accounting for joint ventures and excludes the positive impact
         of hyperinflation of R776 million (December 2013: R739 million).
    »    Excludes the positive impact of hyperinflation of: Syria R111 million (December 2013: Nil), Sudan R130 million (December
         2013: Nil).
    ®    Tower sale profits for the year include: Nigeria R7 329 million, Zambia R48 million, Rwanda R2 million, Ghana R20 million and
         release of deferred profit of R31 million (2013: Cameroon R335 million, Ivory Coast R574 million, Ghana R21 million and release
         of deferred profit of R38 million).
    (a)  2013 amounts restated, refer to notes 5 and 18.

                                                                                         2014                  2013
8.  EARNINGS PER ORDINARY SHARE
    Number of ordinary shares in issue
    At end of the year (excluding MTN Zakhele and treasury shares~)             1 822 213 500         1 832 845 805
    Weighted average number of shares
    Shares for earnings per share                                               1 831 196 131         1 832 729 584
    Add: dilutive shares
    – MTN Zakhele shares issued                                                     7 192 687             6 740 791
    – Share schemes                                                                 2 865 069             2 988 671
    Shares for dilutive earnings per share                                      1 841 253 887         1 842 459 046
      
    ~ Treasury shares of 11 649 825 (December 2013: 23 402 918) held by the Group and MTN Zakhele options of 14 492 564
      (December 2013: 17 030 125) have been excluded from this reconciliation.

                                                                                         2014               2013(a)
                                                                                           Rm                    Rm
    Reconciliation between profit attributable to the equity holders of the 
    Company and headline earnings 
    Profit after tax                                                                   32 079                26 751
    Net profit on disposal of non-current assets held for sale                        (6 237)                 (510)
    Net loss on disposal of property, plant and equipment 
    and intangible assets                                                                  63                    34
    Net impairment/(reversal of impairment) of property, plant and 
    equipment and intangible assets                                                       565                  (20)
    Realisation of deferred gain                                                        (364)                 (357)
    Loss on disposal of investment in joint venture                                        15                     –
    Realisation of deferred gain on disposal of non-current assets held 
    for sale                                                                             (31)                  (38)
    Impairment of goodwill                                                              2 033                     –
    Basic headline earnings¤¤                                                          28 123                25 860
    Earnings per share (cents)  
    – Basic                                                                             1 752                 1 460
    – Basic headline                                                                    1 536                 1 411
    Diluted earnings per share (cents)  
    – Diluted                                                                           1 742                 1 452
    – Diluted headline                                                                  1 527                 1 404
 
    ¤¤   Headline earnings is calculated in accordance with circular 2/2013 Headline Earnings as issued by the South African Institute of
         Chartered Accountants at the request of the JSE Limited.
    (a)  2013 amounts restated, refer to notes 5 and 18.                             
                                                                                        2014                  2013
                                                                                          Rm                    Rm
9.  SHARE OF RESULTS OF JOINT VENTURES AND ASSOCIATES                                          
    AFTER TAX                                                                          4 208                 3 431
    Irancell Telecommunication Company Services (PJSC)                                 4 113                 3 115
    Others                                                                                95                   316
                                        
10. CAPITAL EXPENDITURE INCURRED                                                      25 406                30 164
11. CONTINGENT LIABILITIES                                                               932                 1 023
12. AUTHORISED CAPITAL EXPENDITURE FOR PROPERTY,                                          
    PLANT AND EQUIPMENT AND SOFTWARE                                                  29 693                26 151
13. INTEREST-BEARING LIABILITIES                                          
    Bank overdrafts                                                                       26                    23
    Current borrowings                                                                13 783                11 338
    Current liabilities                                                               13 809                11 361
    Non-current borrowings                                                            39 470                34 664
                                                                                      53 279                46 025

14. ISSUE AND REPAYMENT OF DEBT AND EQUITY SECURITIES
    During the year under review the following entities raised and repaid significant debt instruments:
            
    – MTN Nigeria Communications Limited ("MTN Nigeria") raised R2,0 billion additional debt through an
      export credit facility and a vendor finance facility.
          
    – MTN Nigeria repaid R1,9 billion relating to an export credit facility.
          
    – MTN Holdings Proprietary Limited ("MTN Holdings") raised R2,3 billion additional debt through a
      syndicated loan facility, R1,0 billion through a revolving credit facility, R2,0 billion through a long-term
      loan and R10,7 billion through short-term general borrowings.

    – MTN Holdings repaid R1,3 billion relating to long-term borrowings and R12,0 billion relating to short-term
      general borrowings.
             
    – MTN International (Mauritius) Limited ("MTN Mauritius") raised R3,3 billion debt through a revolving
      credit facility.
          
    – MTN Mauritius repaid R3,3 billion relating to the revolving credit facility.

    In accordance with the Domestic Medium Term Note Programme previously established by MTN Holdings,
    the Group issued no Senior Unsecured Zero Coupon Notes in the current year (2013: R3,9 billion).
    R2,4 billion (2013: R6,0 billion) has been repaid in terms of the Domestic Medium Term Programme during
    the year.

    MTN (Mauritius) Investments Limited issued USD750 million Guaranteed Notes which are due on
    11 November 2024. Interest is payable semi-annually in arrears at 4,755% per annum.
     
    During the year, MTN Holdings acquired 10 704 475 shares in the ordinary share capital of the Company
    for an amount of R2,4 billion bringing the cumulative repurchase to 1,8% of issued shares since 2011.
    The shares so acquired are fully paid up and are held as treasury shares. There were no share buy-back
    transactions during 2013.

15. NON-CURRENT ASSETS HELD FOR SALE
    The Group entered into a transaction with IHS Holding Limited ("IHS") for the disposal of 9 132 mobile
    network towers by MTN Nigeria. Tranche 1 of the transaction constituting 4 154 towers was concluded
    during the year with tranche 2 constituting 4 978 towers expected to close independently during the
    second quarter of 2015, subject to customary closing conditions.

    The Group retained an interest in the tower business and MTN Nigeria will be the anchor tenant on
    commercial terms on the towers for an initial term of 10 years.

    In addition, the Group concluded transactions with IHS in which IHS acquired 550 mobile network towers
    from MTN Rwandacell Limited ("MTN Rwanda") for USD48 million and 748 towers from MTN (Zambia)
    Limited ("MTN Zambia") for USD57 million. IHS is a 100% shareholder of the tower companies set up in
    each country to manage the towers and other passive infrastructure. MTN Rwanda and MTN Zambia will
    be the anchor tenants on commercial terms on the towers for an initial term of 10 years.

16. BUSINESS COMBINATIONS AND ACQUISITION OF JOINT VENTURES
    Middle East Internet Holding
    The Group and Rocket Internet have formed a joint venture, Middle East Internet Holding ("MEIH"),
    to develop internet businesses in the Middle East, with the Group and Rocket Internet being 50%
    shareholders in MEIH. The Group invested EUR120 million consisting of a EUR40 million cash payment
    and EUR80 million contingent consideration into MEIH. The transaction closed on 20 May 2014.

    Acquisition of Africa Internet Holding
    The Group has acquired 33,3% of Africa Internet Holding ("AIH") for EUR168 million, a joint venture
    between Rocket Internet and Millicom International Cellular, to develop internet businesses in Africa.
    The Group, Millicom International Cellular and Rocket Internet have each become 33,3% shareholders in
    AIH. The transaction closed on 1 July 2014.

    Afrihost
    In November 2014 , the Group acquired 50% plus one of the share capital of Afrihost Proprietary Limited
    ("Afrihost") for R408 million, thereby resulting in the Group obtaining control of Afrihost. Control over Afrihost
    will enable the Group to drive its accelerated SME strategy and provide scale for the Group's virtual market,
    content and cloud offering. Net identifiable assets acquired of R179 million and non-controlling interests
    of R90 million resulted in goodwill of R319 million determined on a provisional basis.

    Nashua
    In November 2014, the Group acquired its Nashua Mobile subscriber base from Nashua Mobile Proprietary
    Limited for R1 246 million. The acquisition of the subscriber base will enable the Group to consolidate
    the MTN postpaid subscriber base into one entity and own the relationship with the subscribers.
    Net identifiable assets acquired of R721 million resulted in goodwill of R525 million determined on a
    provisional basis.

17. EVENTS AFTER REPORTING PERIOD
    Syria freehold licence
    MTN Syria (JSC) ("MTN Syria") operated under a contractual service arrangement granted and controlled
    by the Syrian Telecommunication Establishment ("STE"). The contract known as Build, Operate and
    Transfer ("BOT") provided for revenue sharing between MTN Syria and the STE and required the handing
    over of the network to the STE at the end of the licence period. Subsequent to the reporting period, the
    Group concluded its negotiations with the STE for a freehold licence. This resulted in the termination
    of the BOT contract and acquisition of a freehold licence with a term of 20 years with effect from
    1 January 2015. The initial licence fee of SYP25 billion was funded through cash balances maintained
    within the local operation.

    Dividends declared
    Dividends declared at the board meeting held on 3 March 2015 amounted to 800 cents per share.

18.  IMPACT OF THE IAS 18 VOLUNTARY CHANGE IN ACCOUNTING POLICY (IAS 18 Revenue)
18.1 Income statement
                                                           31 December 2013
                                                                Adjustments
                                                              for change in
                                                Previously       accounting
                                                  reported           policy        Restated
                                                        Rm               Rm              Rm
     Revenue                                       136 495              775         137 270
     Other operating expenses                     (10 143)            (133)        (10 276)
     EBITDA                                         59 788              642          60 430
     Income tax expense                           (12 307)            (180)        (12 487)
     Profit after tax                               30 400              462          30 862
     Basic earnings per share (cents)                1 434               26           1 460
     Basic headline earnings per share (cents)       1 386               25           1 411
     Diluted earnings per share (cents)              1 427               25           1 452
     Diluted headline earnings per share (cents)     1 378               26           1 404

18.2 Statement of financial position
                                            31 December 2013                   1 January 2013
                                                 Adjust-                            Adjust-
                                               ments for                          ments for
                                               change in                          change in
                                  Previously  accounting             Previously  accounting
                                    reported      policy   Restated    reported      policy   Restated
                                          Rm          Rm         Rm          Rm          Rm         Rm
     Non-current assets
     Deferred tax and other
     non-current assets                7 613       2 173      9 786       9 055       1 603     10 658
     Current assets 
     Other current assets             32 808         662     33 470      26 522         590     27 112
     Total assets                    226 821       2 835    229 656     181 637       2 193    183 830
     Total equity                    119 771       2 041    121 812      98 450       1 579    100 029
     Attributable to equity  
     holders of the Company          114 438       2 041    116 479      94 569       1 579     96 148
     Non-current liabilities  
     Deferred tax and other  
     non-current liabilities          14 402         794     15 196      11 391        614      12 005
     Total equity and liabilities    226 821       2 835    229 656     181 637       2 193    183 830

For and on behalf of the Board 
 
PF Nhleko                                      RS Dabengwa 
Chairman                                       Group President and CEO 
 
Fairland 
 
3 March 2015 

For further information on the MTN annual results please refer to the Group's website: 
www.mtn.com

Administration

Registration number: 1994/009584/06             MTN Group sharecare line
ISIN: ZAE000042164                              Toll free: 0800 202 360 or +27 11 870 8206
Share code: MTN                                 if phoning from outside South Africa
Board of Directors                              Office of the Transfer Secretaries
PF Nhleko°°°                                    Computershare Investor Services Proprietary Limited
RS Dabengwa°                                    Registration number 2004/003647/07
BD Goschen°                                     70 Marshall Street, Marshalltown
KP Kalyan°°°                                    Johannesburg, 2001
AT Mikati+°°                                    PO Box 61051, Marshalltown, 2107
MJN Njeke°°°
KC Ramon°°°                                     Joint Auditors
JHN Strydom°°                                   PricewaterhouseCoopers Inc.
AF van Biljon°°°                                2 Eglin Road, Sunninghill, 2157
F Titi°°°                                       Private Bag X36, Sunninghill, 2157
J van Rooyen°°°                                 SizweNtsalubaGobodo Inc.
MLD Marole°°°                                   20 Morris Street East
NP Mageza°°°                                    Woodmead, 2157
A Harper#°°                                     PO Box 2939, Saxonwold, 2132
+Lebanese                                       
#British                                        Sponsor
°Executive                                      Deutsche Securities (SA) Proprietary Limited
°°Non-executive                                 3 Exchange Square, 87 Maude Street, Sandton, 2196
°°°Independent non-executive director
                                                Attorneys
                                                Webber Wentzel
Group Secretary                                 10 Fricker Road, Illovo Boulevard, Sandton, 2107
SB Mtshali                                      PO Box 61771, Marshalltown, 2107
Private Bag X9955, Cresta, 2118
                                                Contact details
Registered Office                               Telephone:      National (011) 912 3000
216 – 14th Avenue, Fairland, 2195                            International +27 11 912 3000
                                                Facsimile:      National (011) 912 4093
American Depository Receipt                                  International +27 11 912 4093
(ADR) programme:
Cusip No. 62474M108 ADR to ordinary Share 1:1   E-mail: investor_relations@mtn.co.za
                                                Internet: http:/www.mtn.com
Depository
The Bank of New York
101 Barclay Street, New York NY. 10286, USA
Date: 04/03/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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