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MTN GROUP LIMITED - Summary of MTN Ghana consolidated annual results for the year ended 31 December 2019

Release Date: 27/02/2020 13:22
Code(s): MTN     PDF:  
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Summary of MTN Ghana consolidated annual results for the year ended 31 December 2019

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

Summary of MTN Ghana consolidated annual results for the year ended 31 December 2019

Salient features

- Subscribers
      - Subscribers increased by 12.3% to 22.6 million (+11.2% to 19.8 million*).
      - Data subscribers increased by 28.6% to 20.1 million (active data subscribers up by 26.6% to 8.1
        million#).
      - Registered Mobile Money (MoMo) subscribers increased by 10.6% to 15.1 million (active MoMo
        subscribers up by 8.9% to 9.1 million*).
- Service revenue up by 22.8% to GH¢ 5,148 million.
- EBITDA up by 65.7% to GH¢ 2,630 million (up by 38.6% to GH¢ 2,200 million under IAS 17).
- EBITDA margin up by 13.2 percentage points (pp) to 50.8% (up by 4.8 pp to 42.5% under IAS 17).
- Capital expenditure (Capex) for the period was GH¢ 1,112 million^ (GH¢ 1,058 million under IAS 17).
- Final dividend of GH¢0.04 per share recommended.



IFRS 16 and IAS 17 comparison
                                                                  IFRS 16 as at                                   IAS 17 as at                                  IAS 17 as at
                                                             31 December 2019                               31 December 2019                              31 December 2018
                                                                      GH¢ 000                                        GH¢ 000                                       GH¢ 000
  Total revenue                                                      5,181,836                                      5,181,836                                     4,218,847
  Service revenue                                                    5,148,158                                      5,148,158                                     4,193,815
  EBITDA                                                             2,630,433                                      2,200,219                                     1,587,629
  EBITDA margin %                                                        50.8%                                          42.5%                                         37.6%
  Capex                                                             1,112,489^                                      1,058,118                                       825,196
  Profit before tax                                                  1,443,374                                      1,575,456                                     1,079,194
  Profit after tax                                                   1,007,958                                      1,107,021                                       754,676




* Aligned with the MTN Group definition, subscribers are SIMs which generate or participate in an event that generates revenue for the company. Out of bracket numbers conform to the respective
  regulator subscriber definition.
# Active data subscribers as per MTN Group definition are data subscribers who have used more than 5MB in a month.
^ Capex under IFRS 16 is made up of Capex spend (GH¢1,058m) and right of use (“RoU”) assets (GH¢54m) for the period.

Commentary

MTN Ghana (Scancom PLC or MTNGH or the Company) delivered a strong performance for the year in a
competitive industry, maintaining market leadership with 55.21%** market share. Service revenue
increased by 22.8% year-on-year (YoY), underpinned by growth in revenue from voice, data and Mobile
Money (MoMo).

Double-digit growth in voice revenue (up 19.4% YoY) was driven by an increase in the number of active
subscribers* (+11.2%), the benefits of various customer value management (CVM) initiatives and pro-
consumer activity, as well as continued improvements to our network. As new lines of revenue continued
to grow much faster than the traditional business, voice revenue’s contribution to service revenue
decreased from 46.3% to 45.0%.

Solid data revenue growth (up 32.5% YoY) was attributable to growth in active data users# (+26.6%),
growth in the number of smartphones (+18.5%) on the network and an increase in data usage (up 85.9%
to 256,301 Terabyte). Data revenue’s contribution to service revenue expanded from 26.3% to 28.4%.

Mobile Money revenue continued to grow strongly (up 28.0%) in a year in which we marked the 10th
anniversary of MoMo in Ghana. MoMo growth was attributable to an increase in the number of active
subscribers* (+8.9%), commissions on cash-in-cash-out transactions, increased transactional activity of
person-to-person (P2P) transactions as well as good growth in more advanced services – such as retail
merchant payments. MoMo revenue’s contribution to service revenue expanded from 17.9% to 18.6%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 65.7% with a YoY EBITDA
margin expansion of 13.2 pp to 50.8%. Under IAS 17 and adjusting for the management fee, the like-for-
like EBITDA margin expanded by 5.9 pp to 43.5% (2018 EBITDA margin: 37.6%). The margin improvement
was supported by lower operating expenses, prudent revenue initiatives as well as distribution
efficiencies.

We continued to invest in our network and rolled out 280 2G, 557 3G, 900 4G and 100 rural telephony
sites.

On the regulatory front, during the year the Payment Systems and Services Act 2019 was passed into law.
This governs the way mobile money services are conducted. As required of existing players, we have
applied for the new licence.

MTN Ghana continues to engage with regulatory stakeholders and maintains a firm focus on achieving
continued improvements in customer experience.

Following the expiry of certain technology licences in 2019, the NCA has renewed our 2G licence for 15
years. We have submitted applications for the renewal of our International Gateway and Fixed Access
licences, which are pending NCA approval.

We continued to invest in our communities, with the MTN Ghana Foundation support reaching a total of
149 projects since inception in 2007. In 2019, the foundation initiated eight new projects in education,
three in health and one in economic empowerment.

The board of MTN Ghana declared an interim dividend of 2 pesewas per share after reviewing the mid-
year performance of the Company. After reviewing the full year performance of the Company, the board
of MTN Ghana shall be recommending a final dividend of 4 pesewas per share, bringing the total dividend
for the 2019 year to 6 pesewas per share. This represents 73.1% of profit after tax and a 20.0% increase
in dividend per share.

2019 marked the ‘year of the customer’ for MTN Ghana and in 2020 we are building on that foundation
as we transition from a traditional mobile telecommunications operator to an emerging digital operator.
In line with our transition journey, MTN Ghana has declared 2020 as the ‘year of the customer: the digital
experience’ with a focus on digitalisation as a tool to enhance customer experience as well as create value
for our shareholders.


**Sourced from the National Communications Authority (“NCA”) Industry Information – Telecom Subscriptions for December 2019 report dated 10 February 2020 (www.nca.org.gh).
* Aligned with the MTN Group definition, subscribers are SIMs which generate or participate in an event that generates revenue for the company. Out of bracket numbers conform to the respective
  regulator subscriber definition.
# Active data subscribers as per MTN Group definition are data subscribers who have used more than 5MB in a month.

Final dividend recommendation

Notice is hereby given that the company’s directors will be recommending to the shareholders at the
annual general meeting to be held on 13 May 2020, the payment of a final dividend of GH¢ 0.04 per share
for the 2019 financial year. This is subject to deduction of appropriate taxes. The number of ordinary
shares in issue at the date of this declaration is 12,290,474,360.

Scancom PLC’s tax reference number is C0003632776. In compliance with the requirements of Ghana
Stock Exchange (“GSE”) rules, the salient dates relating to the payment of the dividend are as follows:

Ex-Dividend Date                                                 Tuesday, 28 April 2020

Qualifying Date                                                  Thursday, 30 April 2020

Dividend Payment date                                            Monday, 25 May 2020

All shareholders registered in the books of Scancom PLC at the close of business on Thursday, 30 April
2020 will qualify for the final dividend.

In view of the foregoing, the ex-dividend date has been set as Tuesday, 28 April 2020. Consequently, an
investor purchasing MTNGH shares before this date will be entitled to the final dividend. However, an
investor buying MTNGH shares on or after Tuesday, 28 April 2020 will not be entitled to the final dividend.

On Monday, 25 May 2020 the dividend will be transferred electronically to the bank accounts or Mobile
Money wallets of shareholders who make use of these facilities.

The dividend statement was approved by the board of directors of the Company on 25 February 2020 and
signed on its behalf by:



Ishmael Yamson                                                            Selorm Adadevoh

Chairman                                                                  Chief executive officer


This announcement is only a summary of the information in the full announcement and does not contain
full or complete details. Please visit https://www.mtn.com.gh/investors/financial-reports for the full set
of financial statements with notes, auditor's report and directors' report.


Fairland
26 February 2020


Lead sponsor
Tamela Holdings Proprietary Limited

Joint sponsor
J.P. Morgan Equities South Africa Proprietary Limited

Date: 27-02-2020 01:22:00
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