Wrap Text
Audited summary group financial statements for the year ended 31 December 2018
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN: ZAE000042164)
("MTN" or "the group")
Summary group financial results for the year ended 31 December 2018
MTN is a leading emerging market mobile operator, serving 233 million subscribers in 21 countries across
Africa and the Middle East. We believe that everyone deserves the benefits of a modern connected life.
Highlights
- Service revenue up 10,7%*
- EBITDA margin up 1,7 percentage points* to 35,9%
- EBITDA^ (before once-off items) up 15,9%*
- Group HEPS up 85,2%** to 337 cents per share
- Group HEPS (after adjustments) 565 cents per share
- Holding Company leverage improves to 2,3x
- Capex intensity 19,3%**
- Final dividend of 325 cents per share
- Growth accelerating, medium-term targets raised and expanded
* Constant currency information after accounting for the impact of the pro forma adjustments as defined
** Reported
^ EBITDA excludes impairment of goodwill, net monetary gains and share of results of associates and
joint ventures after tax
Any forward looking financial information disclosed in this results announcement has not been reviewed or
audited or otherwise reported on by our external joint auditors
Service revenue excludes device and SIM card revenue
Data revenue is mobile access data
Fintech includes Mobile Money (MoMo), insurance, airtime lending and e-commerce
All financial numbers are year-on-year (YoY) unless otherwise stated
All subscriber numbers are compared to end-December 2017 unless otherwise stated
2017 comparatives are restated for the adoption of IFRS 15 and change in the presentation of cash flows
Certain information presented in these results constitutes pro forma financial information. This is presented for
illustrative purposes only. Because of its nature, the pro forma financial information may not fairly present MTN's
financial position, changes in equity, and results of operations or cash flows. The pro forma constant currency
financial information contained in this announcement has been reviewed by the group’s external auditors and their
unmodified limited assurance report prepared in terms of ISAE 3420 is available for inspection at the company’s
registered office on weekdays from 09:00 to 16:00.
1. The financial information presented in these consolidated financial results has been prepared excluding the impact
of hyperinflation and the goodwill and asset impairments, tower profits, the Nigerian regulatory fine (consisting
of the re-measurement impact when the settlement was entered into and the finance costs recognised as a result of
the unwind of the initial discounting of the liability), the profit from the sale of Cyprus, the CBN resolution and
in addition to the above, profit on the exercise of IHS exchange right, Loss on the de-recognition of IHS Loan
receivable and MTN Zakhele Futhi Share base payments, which relate to the 2017 year of assessment
(‘the pro forma adjustments') and constitutes pro forma financial information to the extent that it is not extracted
from the segment disclosure included in the audited summary group financial statements for the year ended
31 December 2018. This pro forma financial information has been presented to eliminate the impact of the pro forma
adjustments from the consolidated financial results to achieve a comparable year-on-year analysis. The pro forma
adjustments have been calculated in terms of the group accounting policies disclosed in the consolidated financial
statements for the year ended 31 December 2017, except for the changes in accounting policies as a result of the
adoption of the accounting pronouncements effective 1 January 2018, and the change in the presentation of cash flows.
2. Constant currency 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 period's
results have been adjusted to the prior period average exchange rates determined as the average of the monthly
exchange rates. The measurement has been performed for each of the group's currencies, materially being that of the
US dollar and Nigerian naira. The constant currency growth percentage has been calculated based on the current year
constant currency results compared to the prior year results. In addition, in respect of MTN Irancell, MTN Sudan,
MTN South Sudan and MTN Syria, the constant currency information has been prepared excluding the impact of
hyperinflation. The economies of Sudan, South Sudan and Syria were assessed to be hyperinflationary for the period
under review and hyperinflation accounting was applied.
The joint independent auditors' audit report by PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant Thornton
Inc. does not report on all of the information contained in this announcement/financial results. Shareholders are
therefore advised that in order to obtain a full understanding of the nature of the joint independent auditors'
engagement they should obtain a copy of the joint independent auditors' audit report together with the accompanying
financial information from MTN's registered office. The directors of MTN take full responsibility for the preparation
of this abridged report and the financial information has been correctly extracted from the underlying audited financial
statements.
The group's results are presented in line with the group's operational structure. This is South Africa, Nigeria,
the Southern and East Africa and Ghana (SEAGHA) region, the West and Central Africa (WECA) region and the Middle East
and North Africa (MENA) region and their respective underlying operations.
The SEAGHA region includes Ghana, Uganda, Zambia, Rwanda, South Sudan, Botswana (joint venture-equity accounted),
eSwatini (joint venture-equity accounted) and Business Group. The WECA region includes Cameroon, Ivory Coast, Benin,
Congo Brazzaville, Liberia, Guinea Conakry and Guinea Bissau. The MENA region includes Iran (joint venture-equity
accounted), Syria, Sudan, Yemen, and Afghanistan. Cyprus was disposed of and is no longer included in the results
effective 4 September 2018.
Although Iran, Botswana and eSwatini form part of their respective regions geographically and operationally, they are
excluded from their respective regional results because they are equity accounted for by the group.
Results overview
Group president and CEO, Rob Shuter comments:
"MTN delivered a very encouraging performance in 2018, meeting our targets for growth in service revenue and EBITDA,
as well as those on reducing capex intensity and improving holdco leverage. The group has now delivered eight quarters
of continued operational improvements.
We continue to benefit from the demographic dividend in the countries in which we operate and, while the markets
remain challenging, we continue to target service revenue growth ahead of inflation.
In the year we made good progress in resolving key regulatory challenges in markets including Benin, Cameroon and
Nigeria. Managing regulatory issues and improving relationships and risk management remains key focus areas for the group,
and we will continue to strengthen these areas in 2019.
Over the next few years, we see significant opportunity to grow subscribers and voice revenue as we also execute on
the large mobile data opportunity. We will also extend our BRIGHT strategy to build MTN into a digital operator with a
major focus on the fintech, digital, enterprise and wholesale business areas.
We believe everyone deserves the benefits of a modern connected life and see opportunity for MTN in providing this. We
are confident that MTN is well placed to continue to deliver on our medium-term guidance and the board remains
committed to targeting growth of 10% to 20% in the dividend going forward."
Overview
MTN reported improved constant currency results for the year ended 31 December 2018, delivering ahead of our
medium-term targets as we remained focused on executing our BRIGHT strategy. Growth in service revenue accelerated, the
margin on earnings before interest, taxation, depreciation and amortisation (EBITDA) increased, and voice and data revenues
continued to expand.
Macroeconomic conditions were challenging in the second half of the year, particularly in the Middle East. In Iran,
the re-introduction of US sanctions resulted in material currency depreciation and increased inflationary pressures and no
further cash was repatriated in the second half. At 31 December 2018, group receivables of R2,8bn remained in Iran.
Among key currency moves in the year was an 11,4% gain of the rand's average exchange rate against the Nigerian naira.
The average rate of the Iranian rial depreciated by 61,3% against the rand, with the closing rate down by 108,9%.
Against our medium-term target of upper-single-digit growth in group service revenue, we delivered a 10,7%* increase
in constant currency terms. This was led by growth of 17,2%* by MTN Nigeria, 23,0%* by MTN Ghana and 4,2% by MTN South
Africa.
At 31 December 2018, the group had 233 million subscribers, up by 16 million from the end of 2017. Robust growth in
voice revenue, along with the continued expansion of data and the acceleration in wholesale revenue in the fourth
quarter, supported overall service revenue growth.
The markets in which we operate remain under-penetrated in terms of mobile services. As we benefit from Africa's young
and growing population, we expect to maintain growth in the core voice business over the medium term. In 2018, voice
revenue increased by 7,3%*. This was underpinned by subscriber growth of 16 million customers, our targeted customer
value management (CVM) efforts as well as the continued shift in Nigeria to voice as we optimised our value-added service
(VAS) offerings.
Group data revenue expanded by 22,0%*, supported by improved coverage; growth in the subscriber base; increasing
handset penetration and the elasticity effects of lower data prices. The effective rate per megabyte across our footprint
declined by 39%.
We continued to record improvements in the quality and capacity of our networks after committing R26 018 million** in
capital expenditure (capex) in the year, rolling out a total of 8 295 3G and 7 257 4G sites. This supported data
adoption, and at the end of 2018 we had 79 million active data users.
Digital revenue decreased by 32,9%* as a result of the ongoing VAS optimisation. Fintech revenue increased to
R7 835 million, an increase of 46,8%*. By year-end, we had 27 million active MoMo users in 14 markets. Both the
liberalisation of the mobile financial services market in Nigeria (through the offering of Payment Services Bank (PSB)
licences) and the launch of MoMo in South Africa are expected to support an acceleration in our MoMo business in the
next few years.
Over the medium term, we will target improved EBITDA margins. In the year, the group's EBITDA margin in constant
currency terms expanded by 1,7 percentage points (pp) to 35,2%*. The reported EBITDA margin was 35,9%** compared to
35,4%** in December 2017. This was largely driven by the improvement in margins in South Africa (+0,7pp) and Nigeria
(+4,5pp excluding the Central Bank of Nigeria (CBN) resolution payment).
The profit on the sale of MTN Cyprus and gains on the dilution of our investments in Iran Internet Group (IIG) and
Jumia Technologies AG further supported the reported EBITDA margin.
Reported headline earnings per share (HEPS) increased to 337 cents** from 182 cents** in 2017. Although significantly
stronger, HEPS were negatively impacted by a YoY swing of 76 cents in the contribution from associates and joint
ventures.
HEPS was also impacted by an aggregate 228 cents by the following significant items: 36 cents relating to the Nigeria
fine interest (from 46 cents in 2017); hyperinflation (excluding impairments) of 45 cents (from 96 cents in 2017); the
impact of foreign exchange losses of 71 cents (from 159 cents in 2017); the impact of forex losses related to MTN
Irancell of 43 cents (from 3 cents in 2017) and the CBN resolution amount of 33 cents. Adjusting for these items,
HEPS would have been 565cps.
As part of a review of our portfolio, in July 2018 we signed an agreement to sell 100% of MTN Cyprus, using the net
sale proceeds of €260 million to reduce holdco dollar debt. In September 2018, MTN Ghana listed on the Ghana Stock
Exchange after an IPO aimed at introducing a broad base of Ghanaian investors.
Regulatory and legal considerations
We addressed various regulatory matters in the year. On 24 December 2018, we announced that MTN Nigeria had
successfully resolved the matter with the CBN related to the notional reversal of a 2008 private placement transaction.
The tax dispute between MTN Nigeria and the Attorney General is yet to be resolved and will come before the Nigerian
courts on 26 March 2019. The audit committees of both MTN Nigeria and MTN Group have assessed the Attorney General
claims and remain of the view that all taxes due have been paid, and as such no provision or contingent liabilities
need to be raised. We will vigorously defend our position on this matter.
In 2018, MTN Cameroon renegotiated its licence agreement as part of an addendum for the usage of 4G spectrum and MTN
Benin concluded a memorandum of understanding with the government as well as concluding negotiations around future
frequency fees. MTN Uganda was granted an extension of its existing operating licence to allow for the conclusion of
negotiations around the terms for the licence renewal. MTN is engaging extensively with the authorities in Uganda over
the more recent developments in the market.
In South Africa, we welcome the recent withdrawal by the government of the proposed Electronic Communications
Amendment (ECA) Bill pending further consultation and we look forward to the speedy resolution of the issue of
spectrum allocation.
In the matter relating to Turkcell's alleged grievances arising from its unsuccessful bid to obtain a mobile licence
in Iran, and the awarding of that licence to MTN Irancell in 2005, MTN continues to be of the strong view that there is
no legal merit to Turkcell's claim and we will continue to vigorously oppose it.
On 8 May 2018, the US announced its decision to withdraw from the JCPOA agreement and to re-impose economic sanctions
against Iran. The sanctions limit the ability of the group to repatriate cash from MTN Irancell, including future
dividends. Sanctions also place pressure on the official exchange rate that is used to translate dividend and loan
receivables as well as the equity-accounted results of MTN Irancell. MTN Group has not factored any cash upstreaming
from MTN Irancell into our cash flow forecasts for the next three years.
Dividends
The board has declared a gross final dividend of 325 cents per share, bringing the total dividend for the year to
500 cents per share.
Prospects and guidance
Well positioned to deliver growth
MTN is a leading operator in regions with the fastest growing telecoms markets. Guided by our BRIGHT strategy, we are
well positioned to grow by leveraging our scale and enhancing our competitive position. With our expanding population
coverage and drive to accelerate smartphone adoption, we will take advantage of the material data and digital opportunity
in our markets. In addition, the combination of our large customer base, extensive networks and deep distribution will
allow us to drive opportunities in fintech, digital, wholesale and enterprise delivering value for all stakeholders.
Portfolio optimisation and asset realisation programme
In 2018 we completed a review of the markets in which we operate to ensure an appropriate strategic and operational
fit, considering demographics, regional synergies, control position and business and regulatory environments.
We also reviewed our non-mobile assets, including our existing investments in tower companies and e-commerce ventures.
While these are important and material investments where we need a tight commercial and operational integration with
our mobile assets wherever possible, they are not viewed as long-term strategic holdings of the group.
As a result of this review, we plan to realise at least R15,0 billion in asset realisations over the next three years
excluding any proceeds from IHS. Proceeds will be used to reduce holding company debt. The IHS investment was fair
valued on the balance sheet at R23,4 billion as at 31 December 2018.
Pursuant to the portfolio review MTN's 53% shareholding in Mascom Wireless Botswana (Pty) Limited (Mascom) has been
identified as non-core in light of the lack of control position (Mascom is a joint venture company and is not
consolidated) and inability therefore to execute the BRIGHT strategy. MTN has accepted an offer from Econet Wireless
(Pty) Limited, our existing partner, to acquire Mascom and in line with IFRS recognition requirements, Mascom has
been classified as an asset held for sale at 31 December 2018. The purchase consideration for MTN's shareholding is
US$300 million representing an EBITDA multiple of approximately 6.1 times. The transaction is subject to various
approvals and is anticipated to be concluded by June 2019.
MTN Nigeria listing
MTN Nigeria expects to list its shares on the Nigerian Stock Exchange in the first half of 2019, subject to
regulatory approvals. This will be achieved via a listing by introduction and will be followed by a public offer
once market conditions are conducive. Over time, and subject to market conditions, we anticipate that the
participation of Nigerians in the ownership of the business will increase from around 20% to 35%.
Revised medium-term guidance
We have revised our medium-term (three to five years) guidance on service revenue growth from upper-single-digit in
constant currency terms to double digit growth, driven by double-digit growth from MTN Nigeria and mid-single-digit
growth from MTN South Africa. Over this period, we expect to continue to widen our group EBITDA margin.
By leveraging historical investments, improved procurement processes and an increasing revenue contribution from our
digital businesses, we expect the group capex intensity to steadily improve over the medium-term following the
introduction of IFRS 16 effective from 2019.
Our improving revenue growth, margins and capex intensity are anticipated to drive significant improvements in group
returns. We expect our adjusted ROE^ to improve from 11,5% in 2018, to above 20% over the medium term.
While the board remains committed to targeting growth of 10% to 20% in the dividend going forward, for 2019 this is
likely to be towards the lower end of this range.
^Adjusted headline earnings/equity capital.
Capex guidance 2019
Estimated Capitalised Capitalised
ZAR (million) 2019 2018 2017
South Africa 8 922 9 448 11 470
Nigeria 7 787 6 888 8 953
SEAGHA 4 477 3 801 3 794
WECA 3 056 3 281 3 696
MENA 2 184 2 215 2 294
Group, Digital and Global Connect 1 635 457 1 173
Total 28 061 26 090 31 380
Hyperinflation - (72) 81
Total reported 28 061 26 018 31 461
Iran (49%) 2 413 3 716 9 274
Financial review
Headline earnings reconciliation
Impairment
Profit on
exercise Gain on
IFRS PPE and of dilution Profit on
reported intangible exchange of invest- sale of
(Rm) 2018 assets1 Goodwill2 right3 ments4 Cyprus5
2018
Revenue 134 560 - - - - -
Other income 3 186 - - - (569) (2 112)
EBITDA 48 246 (206) - - (569) (2 112)
Depreciation, amortisation and
impairment of goodwill 24 670 (312) - - -
Profit from operations 23 576 (206) 312 - (569) (2 112)
Net finance cost 8 331 - - - - -
Hyperinflationary monetary gain 290 - - - - -
Share of results of associates
and joint ventures after tax (527) - - - (134) -
Profit before tax 15 008 (206) 312 - (703) (2 112)
Income tax expense 5 430 - - - - -
Profit after tax 9 578 (206) 312 - (703) (2 112)
Non-controlling interests 859 (42) - - - -
Attributable profit 8 719 (164) 312 - (703) (2 112)
EBITDA margin 35,9%
Effective tax rate 36,2%
2017
Revenue 132 869 - - - -
Other income 6 591 - - (6 017) (28)
EBITDA 46 971 - (6 017) (28) -
Depreciation, amortisation and
impairment of goodwill 26 398 (3 045) (2 631) - - -
Profit from operations 20 573 3 045 2 631 (6 017) (28) -
Net finance cost 9 267 - - - - -
Hyperinflationary monetary gain 264 - - - - -
Share of results of associates
and joint ventures after tax 840 - - - - -
Profit before tax 9 570 3 045 2 631 (6 017) (28) -
Income tax expense 5 020 189 - - - -
Profit after tax 4 550 2 856 2 631 (6 017) (28) -
Non-controlling interests 134 537 - - - -
Attributable profit 4 416 2 319 2 631 (6 017) (28) -
EBITDA margin 35,4%
Effective tax rate 52,5%
Headline earnings reconciliation (continued)
Hyper-
inflation
Nigeria (excluding Forex
fine impair- Forex losses -
(Rm) Other6 interest7 ments)8 losses9 Iran9
2018
Revenue - - 174 - -
Other income (3) - (4) - -
EBITDA (3) - 35 - -
Depreciation, amortisation and
impairment of goodwill - - (261) - -
Profit from operations (3) - 296 - -
Net finance cost - (812) (3) (1 945)
Hyperinflationary monetary gain - - (290) - -
Share of results of associates
and joint ventures after tax - - 873 - 1 034
Profit before tax (3) 812 882 1 945 1 034
Income tax expense 6 - 38 503 258
Profit after tax 3 812 844 1 442 775
Non-controlling interests - 172 38 172 0
Attributable profit 3 640 806 1 270 775
EBITDA margin
Effective tax rate
2017
Revenue - - (504) - -
Other income (42) - - - -
EBITDA (42) - (91) - -
Depreciation, amortisation and
impairment of goodwill - - (984) - -
Profit from operations (42) - 893 - -
Net finance cost - (1 047) 3 (4 355)
Hyperinflationary monetary gain - - (264) - -
Share of results of associates
and joint ventures after tax - - 1 328 - 80
Profit before tax (42) 1 047 1 954 4 355 80
Income tax expense - - 69 1 127 20
Profit after tax (42) 1 047 1 885 3 228 60
Non-controlling interests - 222 153 385 0
Attributable profit (42) 825 1 732 2 843 60
EBITDA margin
Effective tax rate
Headline earnings reconciliation (continued)
Loss on
derecog- Nigeria
MTN nition of CBN %
Zakhele loan reso- Adjusted move-
(Rm) Futhi10 (IHS)11 lution12 2018 ment
2018
Revenue - - - 134 734 1,8
Other income - - - 498 (46,9)
EBITDA - 744 46 136 11,9
Depreciation, amortisation and
impairment of goodwill - - - 24 097 22,1
Profit from operations - - 744 22 039 2,6
Net finance cost - - - 5 571 44,0
Hyperinflationary monetary gain - - - 0 0,0
Share of results of associates
and joint ventures after tax - - - 1 246 (44,6)
Profit before tax - - 744 17 713 (10,9)
Income tax expense - - - 6 236 (2,9)
Profit after tax - - 744 11 489 (14,5)
Non-controlling interests - - 158 1 356 (5,2)
Attributable profit - - 586 10 132 (15,7)
EBITDA margin 34,2%
Effective tax rate 35,2%
2017
Revenue - - - 132 365
Other income 434 - - 938
EBITDA 434 - - 41 227
Depreciation, amortisation and
impairment of goodwill - - - 19 738
Profit from operations 434 - - 21 489
Net finance cost - - - 3 868
Hyperinflationary monetary gain - - - 0
Share of results of associates
and joint ventures after tax - - - 2 248
Profit before tax 434 2 840 - 19 869
Income tax expense - - - 6 425
Profit after tax 434 2 840 - 13 444
Non-controlling interests - - - 1 430
Attributable profit 434 2 840 - 12 014
EBITDA margin
Effective tax rate
1. 2018: Reversal of the hyperinflation-related asset impairment in MTN Sudan (R306 million) and exclusion of the
impact of other asset impairments. 2017: Exclusion of the impact of impairments of assets previously written up
for the impact of hyperinflation for MTN Syria (R1 348 million) and MTN Sudan (R1 690 million), partly offset by
a reversal of assets previously impaired.
2. Represents the exclusion of the impact of goodwill impairment recognised. 2018: In relation to MTN Yemen
(R312 million). 2017: In relation to MTN Yemen (R807 million), MTN Afghanistan (R841 million) and MTN Sudan
(R983 million). An amount of R192 million of the goodwill impairment on MTN Sudan relates to the carrying value of
goodwill previously written up for the impact of hyperinflation.
3. The financial impact relating to R6 017 million profit realised on the exercise of the exchange right where the
interest in the Nigeria tower company was exchanged for an increased shareholding in IHS Holdings is excluded.
4. Represents the gain on dilution of the group's investments in International Digital Services Middle East Limited
following the entry of a new investor into that business.
5. The profit on sale of Cyprus (R2 112 million) is excluded
6. The sale of tower assets during the financial period. 2018: release of a deferred gain of R23 million
(2017: R27 million) in Ghana and offset by losses incurred on the disposal of items of property, plant and
equipment are excluded.
7. Exclusion of finance cost recognised as a result of the unwind of the discounting of the financial liability
created on conclusion of the Nigeria regulatory fine.
8. The impact of hyperinflation is excluded for the operations that are currently accounted for on a hyperinflationary
basis (MTN Syria, MTN Sudan and MTN South Sudan) as well as those that have previously been accounted for on a
hyperinflationary basis. The economy of MTN Sudan was assessed to be hyperinflationary effective 1 July 2018 and
hyperinflation accounting was applied for the six months ended 31 December 2018. The economy of Iran was assessed
to no longer be hyperinflationary effective 1 July 2015 and hyperinflation accounting was discontinued from this
date onwards. For this operation the impact of hyperinflation unwind over time mainly through depreciation,
amortisation or subsequent asset impairments.
9. Adjustment for the net forex losses impacting earnings for the respective periods.
10.Represents the IFRS 2 Share-based payment impact of MTN Zakhele Futhi. MTN made an offer of ordinary shares to
qualifying BEE investors in 2016. During 2017, the group issued a portion of the shares previously underwritten
resulting in the recognition of a IFRS 2 Share-based payment expense of R434 million.
11.Represents the impact of the loss on the derecognition of the long-term loan receivable from IHS amounting to
R2 840 million
12.Represents the impact of the Nigeria CBN resolution (R744 million).
Exchange rates
The stronger average rand and the depreciation of the Nigerian naira and the Iranian rial had a negative translation
impact on rand-reported results for the period. The average naira depreciated by 10,1% against the US dollar YoY, and
the closing rate at end-December 2018 was down 1,2% YoY. The average rand strengthened by 1,0% YoY against the US dollar
and closed 13,8% weaker.
Revenue
Group revenue increased by 10,2%* and service revenue increased by 10,7%*, supported by growth in MTN Nigeria (up
17,2%*), MTN Ghana (up 23,0%*), MTN South Africa (up 4,2%) and MTN Uganda (up 8,9%*). MTN Cameroon and MTN Ivory Coast
delivered a 7,3%* and 6,6%* decline in service revenue respectively.
In 2018, voice grew 7,3%* to R82,2 billion, data was up 22,0%* to R28,5 billion, fintech grew 46,8%* to
R7,8 billion and digital declined 32,9%* to R3,9 billion. Enterprise and wholesale grew by 8,4%* and 63,7%*
respectively to R13,4 billion and R2,8 billion.
Costs
Total costs were well contained, increasing by 8,3%*. They were negatively impacted by foreign-denominated
expenses in Nigeria and costs associated with the rollout of network sites.
EBITDA
EBITDA excludes impairment of goodwill, net monetary gains and share of results of associates and joint
ventures after tax. Group EBITDA increased by 15,9%*. It was driven by increases of 30,7%*, 7,0%*, 15,2%*
and 14,4%* in MTN Nigeria, MTN South Africa, MTN Ghana and MTN Uganda respectively, and lower head office
costs, which were partially offset by the underperformance from MTN Cameroon and MTN Ivory Coast. The group
EBITDA margin increased by 1,7 percentage points* to 35,9%.
Depreciation, amortisation and impairment of goodwill
The group depreciation charge increased by 12,6%* because of higher capex over the past few years.
Amortisation costs increased by 12,0%*, after higher expenditure on software in the previous period.
Non-hyperinflation-related goodwill impairments consisted of impairments in Yemen (R312 million**).
Net finance costs
Net finance costs decreased by 10,1%**.
Net forex losses decreased by 56,3%**, largely impacted by lower foreign-denominated debt in Nigeria.
Net forex losses mainly included:
Head office forex losses of R1 058 million, and
Forex losses in Nigeria of R115 million incurred on US dollar-denominated third-party payables.
Share of results of associates and joint ventures after tax
We reported a loss of R527 million** from associates and joint ventures, compared to a profit of
R840 million** in 2017. This was mainly impacted by the decline in the contribution from MTN Irancell
following the marked depreciation in the rial.
The share of results of joint ventures was also affected by the increased reported loss in Jumia Technologies AG.
The YoY comparison is impacted by a prior year adjustment on consolidation.
Taxation
The reported effective tax rate was 36,2%**, lower than the prior year mainly due to higher profit before tax
and the impact of: the non-taxable gain from the sale of MTN Cyprus, lower non-deductible MTN Sudan expenses and
lower Nigeria fine and expenses. The prior year's rate (52,5%**) had been mainly impacted by the lower profit before
tax, combined with the impact of higher MTN Sudan non-deductible expenses and non-deductible goodwill impairments
in MTN Afghanistan, Yemen and Sudan. For 2018, the group's reported taxation charge increased by 8,2%** year-on-year
to R5 430 million**.
Earnings
We reported basic earnings per share (EPS) of 485 cents** compared to 246 cents** in the prior year. HEPS were
negatively impacted by a swing of 76 cents in associates and joint ventures. HEPS of 337 cents were also impacted
by in aggregate 228 cents by the following significant items: 36 cents relating to the Nigeria fine interest
(from 46 cents in 2017); hyperinflation (excluding impairments) of 45 cents (from 96 cents in 2017); the impact of
foreign exchange losses of 71 cents (from 159 cents in 2017) and 33 cents from the CBN resolution payment.
Cash flow
Cash inflows generated from operations for the year came in at R40 345 million**. The group repatriated
R1 296 million** in cash from MTN Irancell in the first half of 2018. Key cash outflows included cash capex of
R28 196 million** and dividends paid to equity holders of R11 236 million**.
Capital expenditure
Capex decreased by 10,6%* (decreased by 17,3%** to R26 018 million**) for the year.
Financial position
Gearing at the holdco improved to 2,3x from 2,9x at the interim period and we remain committed to our
medium-term target of holdco gearing in the 2,0x to 2,5x range.
Net debt was R63 546 million** from R57 145 million** reported at the prior year-end and R69 831 million**
reported at the interim period. This was negatively impacted by the weaker closing rand and the payment of the
final dividend under the previous dividend policy, partially offset by cash from the sale of MTN Cyprus as well
as the MTN Ghana IPO.
Operational review
MTN South Africa
- Service revenue increased by 4,2%
- Data revenue increased by 12,7%
- Digital and fintech revenue increased by 4,7%
- EBITDA grew by 7,0% to R15 660 million
- EBITDA margin increased by 0,7pp to 35,1%
- Capex decreased by 17,6%
MTN South Africa reported a steady improvement in service revenue, cash generation and profitability for the
year in line with our guidance on service revenue growth and EBITDA margin improvement. This was supported
by strong growth in the consumer postpaid business, significant growth in the wholesale business on the back
of the network roaming agreements and stability in the enterprise business in the second half of the year.
The growth in customer service revenue was below expectations with the prepaid business being the main drag.
The focus on stabilising and growing the enterprise business is delivering results and is expected to show
traction in the year ahead, supporting service revenue growth.
Prepaid service revenue increased by 0,2%*, while postpaid service revenue increased by 3,8%*: a strong
improvement over the first half decline of 2,5%. The postpaid performance was supported by lower churn and
strong data volumes, with data revenue up over 30%, well ahead of the market. There was a marked increase in
competition which is expected to impact market growth in 2019.
The subscriber base increased by 5,7% from December 2017 to 31,2 million as we continued to record network
improvements and clearly brought market share losses to an end.
MTN SA received various accolades as the best network service provider in South Africa. We are embarking on
a further radio network modernisation programme that will ensure we remain at the forefront of technological
development and future-ready for 5G services.
We implemented several changes to our pricing of data packages, and additional changes will be implemented
in the coming months as we conclude our pricing transformation. We will launch our Mobile Money offering in
the coming months. This, together with new media offerings, is expected to drive growth in digital revenue.
We note the withdrawal of the Electronic Communications Amendment Bill (ECA) and we will in the coming months
be working with the government and regulators on a framework to achieve a sustainable telecommunications
industry for the country. We have implemented the revised end-user and subscriber service charter regulations.
MTN Nigeria
- Service revenue increased by 17,2%*
- Data revenue increased by 40,1%*
- Digital and fintech revenues decreased by 35,5%*
- EBITDA grew by 30,7%* to R18 394 million* (excl. CBN payment)
- EBITDA margin increased by 4,5 pp* to 43,5%* (excl. CBN payment)
- Capex decreased by 18,1%*
MTN Nigeria extended the strong performance evidenced at the interim period and reported full-year results
ahead of expectations, with double-digit growth in voice revenue (+18,7%*) driving strong service revenue growth
and the further widening of the EBITDA margin. This was despite the margin being negatively impacted by once-off
legal costs related to the resolution with the CBN as well as the planned listing costs. These costs totalled
R194 million. MTN Nigeria is clearly benefiting from deliberate investments in our network, cost optimisation
initiatives and human capital.
Increased usage and the growth in data subscriber numbers supported higher data revenue. Digital revenue declined
because of further optimisation of value-added services (VAS), but we expect a return to digital revenue growth
in 2019.
The subscriber base expanded by 11,3% from December 2017 to 58,2 million. The business has applied for a
PSB licence and we are hopeful this will be awarded in the coming months, opening up a meaningful opportunity.
We plan to list by introduction on the Nigerian Stock Exchange during the first half of 2019 and are looking to
simplify the capital structure ahead of this listing.
In February 2019, MTN Nigeria resumed dividend payments to MTN Group and we anticipate further regular cash
upstreaming over the coming years.
Southern and East Africa and Ghana (SEAGHA)
- Service revenue increased by 20,4%*
- Data revenue increased by 27,6%*
- Digital revenue declined by 22.5%*
- Fintech revenue increased by 47,5%*
The strong performance from the SEAGHA region was largely driven by MTN Ghana, which lifted service revenue
by 23,0%*. The growth in data revenue across the region followed the increased network rollout across most
markets. Both MTN Ghana and MTN Uganda continued to drive the strong performance in fintech revenue, with a
growing contribution from MoMo. This remains a key focus area for the medium-term.
West and Central Africa (WECA)
- Service revenue decreased by 5,0%*
- Data revenue increased by 16,2%*
- Digital revenue declined by 38,8%*
- Fintech revenue increased by 49,6%*
WECA's service revenue performance was negatively impacted by the under-performance of both MTN Cameroon and
MTN Ivory Coast. The operating environment in Cameroon in particular was extremely challenging, particularly
given the conflict in the Northwest and Southwest regions. We are encouraged by the positive YoY service revenue
trends in recent months. Across the region we saw a strong increase in MoMo customers. This is expected to support
an acceleration in fintech revenue in the coming year. The VAS optimisation across the markets drove the decline
in digital revenues.
Middle East and North Africa (MENA) (excluding Iran)
- Service revenue increased by 20,4%*
- Data revenue increased by 29,6%*
- Digital revenue increased by 27,0%*
- Fintech revenue increased by 4,5%*
Notwithstanding the geopolitical challenges across the region, the MENA region delivered a strong performance
in the year, with service revenue growth in excess of 20% supported by the strong growth in data revenue across
the region.
Associates, Joint Ventures and Investments
Telecoms operations
MTN Irancell recorded a satisfactory result given the challenges the business faced following the re-introduction
of US sanctions. The business reported service revenue growth of 14,0%*, with data revenue growth of 34,6%*. The
reported results from Iran were, however, negatively impacted on translation following the 61.3% decline in the
average rate of the rial against the rand, as well as higher forex losses.
MTN eSwatini also recorded satisfactory results. The results from Mascom, our associate in Botswana, were
de-consolidated in light of the impending sale of this business.
The aYo insurance operation performed very well and now has almost three million policies across our African
footprint.
The carrier business BICS also traded well and we are in the process of extending our commercial agreements
with BICS.
E-commerce investments
The e-commerce joint ventures continued to grow. Within Jumia Technologies AG, online shopping site Jumia
continued to report solid top-line growth. During 2018, the increase in gross merchandise value was 63%. This
was powered by an increase in unique active consumers to four million and active sellers to 59 000.
Within Middle East Internet Holding, online retailer Wadi's grocery delivery service is the market leader in
Saudi Arabia. Ride-hailing service Jeeny recorded a 60% YoY increase in ride numbers and cleaning service app
Helpling increased bookings by 63% YoY.
Within IIG, cab-hailing and online food ordering service app Snapp reached 1,5 million daily rides and 44 000
delivered food orders a day. Hotel reservation app Snapptrip became the number one player in the Iran hotel
booking market.
During the year the e-commerce joint ventures raised in aggregate €155 million in third-party funding.
As MTN refocuses its business in the future on building an integrated digital operator, these e-commerce
holdings, while important investments, are not viewed as long-term strategic holdings for the group.
Investments in tower companies
Our associate tower businesses include our 49% holdings in both ATC Ghana and ATC Uganda. During the year
we saw a strong turnaround in the contribution from both tower businesses from a loss of R38 million in 2017
to a profit of R268 million in 2018. Our 29% investment in IHS was fair valued at 23,4 billion at the year-end.
Although towers is an important operational component of the business, the investments in the existing tower
companies are not viewed as long-term strategic holdings of the group.
Board changes
We announced the appointment of three new independent non-executive directors. Swazi Tshabalala and
Mcebisi Jonas joined the board on 1 June 2018 and Khotso Mokhele joined the board on 1 July 2018.
Declaration of final ordinary dividend
Notice is hereby given that a gross final dividend of 325 cents per share for the period to 31 December 2018
has been declared. The number of ordinary shares in issue at the date of this declaration is 1 884 296 758
(including 9 791 839 treasury shares held by MTN Holdings and 76 835 378 shares held by MTN Zakhele Futhi).
The dividend will be subject to a maximum local dividend tax rate of 20% which will result in a net dividend of
260 cents per share to those shareholders who bear the maximum rate of dividend withholding tax of 65 cents per
share. The net dividend per share for the respective categories of shareholders for the different dividend
tax rates is as follows:
0% 325,00 cents per share
5% 308,75 cents per share
7,5% 300,63 cents per share
10% 292,50 cents per share
12,5% 284,38 cents per share
15% 276,25 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:
Declaration date Thursday, 7 March 2019
Last day to trade cum dividend on the JSE Tuesday, 26 March 2019
First trading day ex dividend on the JSE Wednesday, 27 March 2019
Record date Friday, 29 March 2019
Payment date Monday, 1 April 2019
No share certificates may be dematerialised or re-materialised between Wednesday, 27 March 2019 and
Friday, 29 March 2019, both days inclusive. On Monday, 1 April 2019 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, 1 April 2019 will be posted on
or about this date. Shareholders who hold dematerialised shares will have their accounts held by the
Central Securities Depository Participant or broker credited on Monday, 1 April 2019.
For and on behalf of the board
PF Nhleko RA Shuter RT Mupita
Group chairman Group president and CEO Group CFO
6 March 2019
Fairland
The audited summary group financial statements have been independently audited by the group's external
auditors. The audited summary group financial statements have been prepared by the MTN financial staff
under the guidance of the group finance operations executive, S Perumal, CA(SA) and was supervised by the
group chief financial officer, RT Mupita, BScEng (Hons), MBA, GMP.
The results were made available on 7 March 2019.
Independent auditors' report on the summary consolidated financial statements
To the Shareholders of MTN Group Limited
Opinion
The summary consolidated financial statements of MTN Group Limited, contained in the accompanying
preliminary report, which comprise the summary consolidated statement of financial position as at
31 December 2018, the summary consolidated income statement and the summary statements of comprehensive
income, changes in equity and cash flows for the year then ended, and related notes, are derived from the
audited consolidated financial statements of MTN Group Limited for the year ended 31 December 2018.
In our opinion, the accompanying summary consolidated financial statements are consistent, in all material
respects, with the audited consolidated financial statements, in accordance with the requirements of the JSE
Limited Listings Requirements for preliminary reports, as set out in note 3 to the summary consolidated
financial statements, and the requirements of the Companies Act of South Africa as applicable to summary
financial statements.
Summary Consolidated Financial Statements
The summary consolidated financial statements do not contain all the disclosures required by International
Financial Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual
financial statements. Reading the summary consolidated financial statements and the auditors' report thereon,
therefore, is not a substitute for reading the audited consolidated financial statements and the auditors'
report thereon.
The Audited Consolidated Financial Statements and Our Report Thereon
We expressed an unmodified audit opinion on the audited consolidated financial statements in our report
dated 6 March 2019. That report also includes communication of key audit matters. Key audit matters are those
matters that, in our professional judgement, were of most significance in our audit of the consolidated financial
statements of the current period.
Directors' Responsibility for the Summary Consolidated Financial Statements
The directors are responsible for the preparation of the summary consolidated financial statements in
accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, set out in
note 3 to the summary consolidated financial statements, and the requirements of the Companies Act of South Africa
as applicable to summary financial statements.
Auditors' Responsibility
Our responsibility is to express an opinion on whether the summary consolidated financial statements are
consistent, in all material respects, with the audited consolidated financial statements based on our procedures,
which were conducted in accordance with International Standard on Auditing (ISA) 810 (Revised), Engagements
to Report on Summary Financial Statements.
PricewaterhouseCoopers Inc. SizweNtsalubaGobodo Grant Thornton Inc.
Director: SN Madikane Director: DH Manana
Registered Auditor Registered Auditor
Johannesburg Johannesburg
6 March 2019 6 March 2019
Summary group income statement
for the year ended 31 December
2017
2018 Restated1
Note Rm Rm
Revenue 6 134 560 132 869
Other income 7 3 186 6 591
Direct network and technology operating costs (25 370) (25 077)
Costs of handsets and other accessories (11 638) (10 764)
Interconnect and roaming costs (10 731) (10 974)
Staff costs (9 510) (9 082)
Selling, distribution and marketing expenses (16 798) (17 194)
Government and regulatory costs (4 889) (5 150)
Impairment of trade receivables and contract assets (810) (836)2
CBN resolution 8 (744) -
Other operating expenses (9 010) (13 412)2
EBITDA3 48 246 46 971
Depreciation of property, plant and equipment (19 709) (19 277)
Amortisation of intangible assets (4 649) (4 490)
Impairment of goodwill (312) (2 631)
Operating profit 23 576 20 573
Net finance costs 12 (8 331) (9 267)
Loss on derecognition of long-term loan receivable - (2 840)
Net monetary gain 290 264
Share of results of associates and joint ventures after tax 13 (527) 840
Profit before tax 15 008 9 570
Income tax expense (5 430) (5 020)
Profit after tax 9 578 4 550
Attributable to:
Equity holders of the company 8 719 4 416
Non-controlling interests 859 134
9 578 4 550
Basic earnings per share (cents) 14 485 246
Diluted earnings per share (cents) 14 478 241
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
2 Impairment of trade receivables was aggregated with other operating expenses in 2017. In 2018, the
amounts were disaggregated and the impairment of contract assets was included in the impairment of trade
receivables. Comparative numbers have been updated accordingly.
3 EBITDA is defined in note 6.
Summary group statement of comprehensive income
for the year ended 31 December
2017
2018 Restated1
Note Rm Rm
Profit after tax 9 578 4 550
Other comprehensive income after tax:
Items that may be reclassified to profit or loss:
Net investment hedges 20 (2 517) 1 421
Foreign exchange movement on hedging instruments (3 497) 1 963
Deferred and current tax 980 (542)
Available-for-sale financial assets2, 3 - 4 439
Gains arising during the year 15 - 4 439
Exchange differences on translating foreign
operations including the effect of hyperinflation2 1 943 (12 417)
Gains/(losses) arising during the year 20 1 943 (12 417)
Items that have been reclassified to profit or loss: (37) 3 298
Reclassification of foreign currency translation
differences on loss of significant influence2 - 3 298
Reclassification of foreign currency translation
differences on loss of control2 (37) -
Items that will not be reclassified to profit or loss:
Equity investments at fair value through other
comprehensive income2, 3 (8 030) -
Losses arising during the year 15 (8 030) -
Other comprehensive income for the year (8 641) (3 259)
Attributable to equity holders of the company (8 847) (2 698)
Attributable to non-controlling interests 206 (561)
Total comprehensive income for the year 937 1 291
Attributable to:
Equity holders of the company (128) 1 718
Non-controlling interests 1 065 (427)
937 1 291
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
2 This component of other comprehensive income does not attract any tax.
3 The available-for-sale investments (2017) and equity investments at fair value through other comprehensive
income (2018) relate mainly to the group's investment in IHS Holding Limited (IHS Group) (note 15).
Available-for-sale financial assets have been reclassified to equity investments at fair value through
other comprehensive income in 2018 on adoption of IFRS 9.
Summary group statement of financial position
as at 31 December
2017
2018 Restated1
Note Rm Rm
Non-current assets 183 810 183 502
Property, plant and equipment 100 581 91 786
Intangible assets and goodwill 40 331 38 330
Investments 15 24 025 27 686
Investment in associates and joint ventures 11 884 19 673
Deferred tax and other non-current assets 6 989 6 027
Current assets 58 038 60 780
Trade and other receivables 29 367 31 006
Other current assets 10 689 11 389
Restricted cash 2 760 2 376
Cash and cash equivalents 15 222 16 009
Non-current assets held for sale 23 2 759 -
Total assets 244 607 244 282
Total equity 88 226 95 720
Attributable to equity holders of the company 84 799 94 188
Non-controlling interests 3 427 1 532
Non-current liabilities 83 811 83 482
Interest-bearing liabilities 17 72 563 70 567
Deferred tax and other non-current liabilities 11 248 12 915
Current liabilities 72 570 65 080
Interest-bearing liabilities 17 12 438 9 153
Trade and other payables 48 354 45 856
Other current and tax liabilities 11 778 10 071
Total equity and liabilities 244 607 244 282
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
Summary group statement of changes in equity
for the year ended 31 December
2017
2018 Restated1
Note Rm Rm
Opening balance at 1 January 94 188 102 380
Adjustment on initial application of IFRS 15 25 - 1 447
Adjustment on initial application of IFRS 9 25 (384) -
Restated balance at 1 January 93 804 103 827
Total comprehensive income (128) 1 718
Profit after tax 8 719 4 416
Other comprehensive income after tax (8 847) (2 698)
Opening reserve adjustment for impact of hyperinflation 531 -
Transactions with owners of the company
Transaction with non-controlling interests 9 1 666 -
Decrease in treasury shares 143 -
Cancellation of share-based payment 21 (295) -
Share-based payment transactions - - 921
MTN Zakhele Futhi
Share-based payment transactions - other 371 237
Dividends declared (11 248) (12 572)
Other movements (45) 57
Attributable to equity holders of the company 84 799 94 188
Non-controlling interests 3 427 1 532
Closing balance at 31 December 88 226 95 720
Dividends declared during the year (cents per share) 625 700
Dividends declared after year-end (cents per share) 325 450
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
Summary group statement of cash flows
for the year ended 31 December
2017
2018 Restated1
Note Rm Rm
Net cash generated from operating activities 32 389 33 387
Cash generated from operations 40 345 38 484
Interest received 2 130 2 607
Interest paid (7 001) (7 237)
Dividends received from associates and joint ventures 13 1 942 7 129
Income tax paid (5 027) (7 596)
Net cash used in investing activities (23 219) (27 585)
Acquisition of property, plant and equipment (24 224) (23 861)
Acquisition of intangible assets (3 972) (2 800)
Increase in non-current investments and joint venture (802) (820)
Proceeds on sale of MTN Cyprus, net of cash disposed of 7 3 986 -
Realisation of bonds, treasury bills and foreign deposits 1 727 1 849
Increase in restricted cash (641) (1 727)
Decrease in restricted cash 647 -
Movement in other investing activities 60 (226)
Net cash used in financing activities (11 123) (14 612)
Proceeds from borrowings 18 25 219 23 287
Repayment of borrowings 18 (27 359) (24 606)
Dividends paid to equity holders of the company (11 236) (12 565)
Dividends paid to non-controlling interests (759) (956)
Proceeds from the Ghana initial public offering 9 3 057 -
Premium received on option issued to MTN Zakhele Futhi - 192
Other financing activities (45) 36
Net decrease in cash and cash equivalents (1 953) (8 810)
Net cash and cash equivalents at beginning of the year 15 937 27 375
Exchange gains/(losses) on cash and cash equivalents 1 564 (2 664)
Net monetary gain on cash and cash equivalents 34 36
Cash classified as held for sale 23 (615) -
Net cash and cash equivalents at end of the year 14 967 15 937
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
Notes to the summary group financial statements
for the year ended 31 December 2018
1. INDEPENDENT AUDIT
The summary group financial statements have been derived from the audited group financial statements.
The directors of the company take full responsibility for the preparation of the summary group financial
statements and that the financial information has been correctly derived and are consistent in all material
respects with the underlying audited group financial statements. The summary group financial statements for
the year ended 31 December 2018 have been audited by our joint auditors PricewaterhouseCoopers Inc. and
SizweNtsalubaGobodo Grant Thornton Inc., who have expressed an unmodified opinion thereon. The auditors
also expressed an unmodified opinion on the group financial statements from which the summary group
financial statements were derived. A copy of the auditors' report on the group financial statements
is available for inspection at the company's registered office, together with the financial statements
identified in the auditors' report.
2. GENERAL INFORMATION
MTN Group Limited (the company) carries on the business of investing in the telecommunications industry
through its subsidiary companies, joint ventures, associates and related investments.
3. BASIS OF PREPARATION
The summary group financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for preliminary financial statements and the requirements of the Companies Act applicable
to summary financial statements. The summary financial statements were prepared in accordance with the framework
concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS)
and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee (APC) and the Financial
Pronouncements as issued by the Financial Reporting Standard Council (FRSC), and to also, as a minimum, contain
the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the group financial statements from which the summary group
financial statements were derived, are in terms of IFRS and are consistent with those accounting policies applied
in the preparation of the previous group financial statements, unless otherwise stated.
The summary group financial statements should be read in conjunction with the group financial statements for the
year ended 31 December 2018, which have been prepared in accordance with IFRS. A copy of the full set of the
audited group 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 International
Accounting Standards Board (IASB) which were effective for the group from 1 January 2018. The following standards
had an impact on the group:
- IFRS 9 Financial Instruments (IFRS 9); and
- IFRS 15 Revenue from Contracts with Customers (IFRS 15).
The accounting policies applied in the preparation of the summary group financial statements are in terms of IFRS
and are consistent with those accounting policies applied in the preparation of the previous group financial
statements except as previously stated and except for a change in the presentation of cash flows. Refer to
note 25 for the details.
5. HYPERINFLATION
The financial statements (including comparative amounts) of the group entities whose functional currencies are
the currencies of hyperinflationary economies are adjusted in terms of the measuring unit current at the end of
the reporting period. The economy of Sudan was assessed to be hyperinflationary effective 1 July 2018, and
hyperinflation accounting was applied for the six months ended 31 December 2018. Upon first application of
hyperinflation, net prior period gains of R625 million were recognised directly in equity. The uplift of the
assets on initial adoption resulted in the net asset value of MTN Sudan Company Limited (MTN Sudan) exceeding
its estimated recoverable amount. As a result of this, the initial adjustment was capped to the recoverable
amount and the difference recorded directly to retained earnings. If the initial uplift had not been capped
the related increase in opening equity would have been R1,2 billion.
As at 31 December 2017(1), the historical increase in the asset value as a result of hyperinflation accounting
had been fully impaired, which resulted in a R1 690 million decrease in EBITDA(2) during 2017. During the
six-month period ended 30 June 2018, R306 million of the impairment was reversed, resulting in an increase
in EBITDA(2). This amount represents the full impairment recognised during 2017, translated at a significantly
weaker exchange rate.
The economy of South Sudan was assessed to be hyperinflationary, effective 1 January 2016, and hyperinflation
accounting was applied since.
In 2015, the Iranian economy was assessed to no longer be hyperinflationary and hyperinflation accounting was
discontinued effective 1 July 2015. The group's results from Irancell Telecommunication Company Services (PJSC)
(Iran) includes expenses resulting from the discontinuation of hyperinflation accounting mainly relating to the
subsequent depreciation of assets that were historically written up under hyperinflation accounting. The
additional income statement charge reduced equity-accounted earnings from Iran by R873 million for the year
ended 31 December 2018 (2017: R1 328 million).
The economy of Syria was assessed to be hyperinflationary, effective 1 January 2014, and hyperinflation
accounting has been applied since. The group's proxy indicator for inflation in Syria remained stable during
the year. Therefore, a hyperinflation adjustment factor of one was applied during the year.
The impact of hyperinflation on the segment analysis is as follows:
2018
Revenue EBITDA(2) Capex
Rm Rm Rm
Syria 9 6 -
Sudan (109) 233 (67)
South Sudan (included in other SEAGHA) 274 32 (5)
174 271 (72)
2017
Revenue EBITDA(2) Capex
Rm Rm Rm
Syria 384 (1 227) 81
Sudan - (1 690) -
South Sudan (included in other SEAGHA) 120 (31) -
504 (2 948) 81
Iran - major joint venture - 69 -
(1) Hyperinflationary accounting was applied previously in Sudan, up until 30 June 2016.
(2) EBITDA is defined in note 6.
6. 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 largely grouped according to their
geographic locations and reporting lines to the CODM. The group's underlying operations
are clustered as follows:
- South Africa;
- Nigeria;
- South and East Africa and Ghana (SEAGHA);
- West and Central Africa (WECA); and
- Middle East and North Africa (MENA).
South Africa and Nigeria comprise the segment information for the South African and Nigerian-based
cellular network services providers respectively.
The SEAGHA, WECA and MENA clusters comprise segment information for operations in those regions
which are also cellular network services providers in the group.
Operating results are reported and reviewed regularly by the CODM 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.
A key performance measure of reporting profit for the group is EBITDA. EBITDA is defined as earnings before
finance income and finance costs (which includes gains or losses on foreign exchange transactions), tax,
depreciation and amortisation, and is also presented before recognising the following items:
- Impairment of goodwill;
- Loss on derecognition of a long-term loan receivable;
- Net monetary gain resulting from the application of hyperinflation; and
- Share of results of associates and joint ventures after tax.
For the purpose of the review of individual segment results by the CODM, EBITDA also excludes the following
items (CODM EBITDA):
- Hyperinflation (note 5);
- Tower sale profits;
- MTN Zakhele Futhi share-based payment expense;
- Profit on exercise of exchange right in IHS Group;
- Gain on dilution of investment in associates and joint ventures (note 13);
- Gain on disposal of subsidiary (note 7); and
- CBN resolution (note 8).
These exclusions have remained unchanged from the prior year, apart from the gain on dilution of investment
in associates and joint ventures, gain on disposal of subsidiary and the CBN resolution which occurred
during the year.
Iran proportionate results are included in the segment analysis as reviewed by the CODM and excluded from
reported results for revenue, EBITDA and capex due to equity accounting for joint ventures. The results
of Iran in the segment analysis exclude the impact of hyperinflation accounting.
Interconnect Digital Revenue from
Network Mobile and and contracts with Interest Total
services devices roaming fintech Other customers revenue revenue
REVENUE Rm Rm Rm Rm Rm Rm Rm Rm
2018
South Africa 28 037 8 389 3 540 2 435 1 866 44 267 391 44 658
Nigeria 30 747 78 3 923 1 942 1 281 37 971 - 37 971
SEAGHA 14 599 278 1 873 5 051 812 22 613 - 22 613
Ghana 7 636 70 1 010 2 945 199 11 860 - 11 860
Uganda 3 495 52 414 1 333 129 5 423 - 5 423
Other SEAGHA 3 468 156 449 773 484 5 330 - 5 330
WECA 14 358 156 2 870 1 994 845 20 223 - 20 223
Ivory Coast 4 547 43 1 183 1 063 322 7 158 - 7 158
Cameroon 3 748 57 563 376 215 4 959 - 4 959
Other WECA 6 063 56 1 124 555 308 8 106 - 8 106
MENA 6 934 230 1 155 308 218 8 845 - 8 845
Syria 2 101 - 89 85 23 2 298 - 2 298
Sudan 1 125 6 457 89 21 1 698 - 1 698
Other MENA 3 708 224 609 134 174 4 849 - 4 849
Major joint venture - Iran 9 252 168 879 1 129 206 11 634 33 11 667
Head office companies
and eliminations (24) (1) (418) 3 516 76 - 76
Hyperinflation impact 148 - 29 (16) 13 174 - 174
Iran revenue exclusion (9 252) 168 (879) (1 129) (206) (11 634) (33) (11 667)
Consolidated revenue 94 799 9 130 12 972 11 717 5 551 134 169 391 134 560
Interconnect Digital Revenue from
Network Mobile and and contracts with Interest Total
REVENUE services devices roaming fintech2 Other2 customers revenue revenue
Restated1 Rm Rm Rm Rm Rm Rm Rm Rm
2017
South Africa 28 851 7 691 2 381 2 325 889 42 137 360 42 497
Nigeria 27 486 108 4 221 3 477 775 36 067 - 36 067
SEAGHA 12 950 239 1 944 4 186 868 20 187 - 20 187
Ghana 6 748 83 1 072 2 339 191 10 433 - 10 433
Uganda 3 251 58 425 1 314 145 5 193 - 5 193
Other SEAGHA 2 951 98 447 533 532 4 561 - 4 561
WECA 15 322 368 2 680 1 728 830 20 928 - 20 928
Ivory Coast 5 259 48 949 878 278 7 412 - 7 412
Cameroon 3 936 197 704 294 242 5 373 - 5 373
Other WECA 6 127 123 1 027 556 310 8 143 - 8 143
MENA 9 929 423 1 553 495 322 12 722 - 12 722
Syria 1 829 - 84 83 5 2 001 - 2 001
Sudan 3 507 23 687 262 61 4 540 - 4 540
Other MENA 4 593 400 782 150 256 6 181 - 6 181
Major joint venture - Iran 12 510 257 1 508 1 974 171 16 420 20 16 440
Head office companies
and eliminations (12) (1) (432) 4 405 (36) - (36)
Hyperinflation impact 426 1 49 17 11 504 - 504
Iran revenue exclusion (12 510) (257) (1 508) (1 974) (171) (16 420) (20) (16 440)
Consolidated revenue 94 952 8 829 12 396 12 232 4 100 132 509 360 132 869
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
2 Subsequent to the publication of the interim results for the six months ended 30 June 2018, the group
updated its definition of digital and fintech revenue which resulted in a reclassification of revenue
from digital and fintech to other revenue. These included caller line identification (CLI), itemised
billing and bulk SMS advertising revenue which are not considered to be part of the main categories
of revenue for the group.
2017
2018 Restated1
EBITDA Rm Rm
CODM EBITDA
South Africa 15 660 14 635
Nigeria 16 574 14 070
SEAGHA 7 865 6 908
Ghana 4 452 4 189
Uganda 1 980 1 794
Other SEAGHA 1 433 925
WECA 4 133 5 335
Ivory Coast 1 593 2 359
Cameroon 455 1 305
Other WECA 2 085 1 671
MENA 2 510 3 810
Syria 909 597
Sudan 590 1 592
Other MENA 1 011 1 621
Major joint venture - Iran 4 231 5 881
CODM EBITDA 50 973 50 639
Head office companies and eliminations (727) (449)
Hyperinflation impact 271 (2 948)
Gain on dilution of investment in associates and joint ventures 569 -
Gain on disposal of subsidiary 2 112 -
Tower sale profits 23 27
Profit on exercise of exchange right in IHS Group - 6 017
MTN Zakhele Futhi share-based payment expense - (434)
CBN resolution (744) -
Iran CODM EBITDA exclusion (4 231) (5 881)
EBITDA 48 246 46 971
Depreciation, amortisation and impairment of goodwill (24 670) (26 398)
Net finance cost (8 331) (9 267)
Loss on derecognition of long-term loan receivable - (2 840)
Net monetary gain 290 264
Share of results of associates and joint ventures after tax (527) 840
Profit before tax 15 008 9 570
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
2018 2017
CAPITAL EXPENDITURE INCURRED Rm Rm
South Africa 9 448 11 470
Nigeria 6 888 8 953
SEAGHA 3 801 3 794
Ghana 2 015 2 196
Uganda 793 909
Other SEAGHA 993 689
WECA 3 281 3 696
Ivory Coast 1 364 1 203
Cameroon 694 976
Other WECA 1 223 1 517
MENA 2 215 2 294
Syria 935 951
Sudan 439 545
Other MENA 841 798
Major joint venture - Iran 3 716 9 274
Head office companies and eliminations 457 1 173
Hyperinflation impact (72) 81
Iran capex exclusion (3 716) (9 274)
26 018 31 461
7. GAIN ON DISPOSAL OF SUBSIDIARY
In July 2018, the group entered into an agreement with Monaco Telecom S.A (Monaco Telecom), in terms of
which Monaco Telecom acquired 100% of the group's interest in MTN Cyprus Limited (MTN Cyprus). The sale
became effective on 4 September 2018. MTN Cyprus was presented as part of other MENA in the segment
information (note 6).
The carrying amounts of the assets and liabilities at the date of sale were:
2018
Rm
Property, plant and equipment 1 093
Intangible assets and goodwill 1 197
Deferred tax and other non-current assets 225
Trade receivables and other current assets 705
Cash and cash equivalents 264
Total assets 3 484
Interest-bearing liabilities 806
Deferred tax and other non-current liabilities 135
Current liabilities 485
Total liabilities 1 426
Carrying amount of net assets sold 2 058
Total disposal consideration 4 231
Cash 4 302
Fair value of contingent consideration (71)
Reclassification of foreign currency translation reserve 34
Transaction costs (95)
Gain on disposal of subsidiary 2 112
Net cash
Cash received 4 302
Less: Cash and cash equivalents in MTN Cyprus (264)
Less: Transaction costs paid (52)
Net cash received on disposal 3 986
8. CBN RESOLUTION
On 30 August 2018, MTN Group announced that MTN Nigeria Communications Limited (MTN Nigeria) received
a letter on 29 August 2018 from the Central Bank of Nigeria (CBN) alleging that Certificates of Capital
Importation (CCIs), issued in respect of the conversion of shareholders loans in MTN Nigeria to preference
shares in 2007, had been improperly issued. The CBN claimed that historical dividends repatriated by
MTN Nigeria between 2007 and 2015 amounting to US$8,1 billion needed to be refunded to the CBN.
MTN Nigeria strongly refuted these allegations and claims, stating that no dividends had been declared or
paid by MTN Nigeria other than pursuant to CCIs issued by its bankers and with the approval of the CBN as
required by law.
On 27 December 2018, MTN Group announced that MTN Nigeria held various engagements in order to find an
equitable resolution to the matter. In particular, a series of meetings were held in Lagos with CBN officials
during November 2018. At these meetings MTN Nigeria provided additional material documentation which
satisfactorily clarified its remittances.
The CBN upon review of the additional documentation concluded that MTN Nigeria is no longer required to
reverse the historical dividend payments made to MTN Nigeria shareholders. However, the CBN maintained that
the proceeds from the preference shares in MTN Nigeria's private placement remittances of 2008 of circa
US$1 billion were irregular having been based on CCIs that only had an approval-in-principle, but not final
regulatory approval by the CBN.
The CBN instructed MTN Nigeria to implement a notional reversal of the 2008 private placement of shares in
MTN Nigeria at a net cost of circa N19,1 billion (CBN resolution amount) (the CBN resolution amount was
equivalent to US$52,6 million at the time of the announcement). This was on the basis that certain CCIs
utilised in the private placement were not properly issued.
MTN Nigeria and the CBN agreed to resolve the matter on the basis that MTN Nigeria had to pay the CBN resolution
amount without admission of liability. In terms of the resolution agreement, the CBN will regularise all the
CCIs issued on the investment by shareholders of MTN Nigeria of circa US$402,6 million without regard to any
historical disputes relating to those CCIs, thereby bringing to a final resolution all incidental disputes
arising from this matter.
MTN Nigeria recognised an expense to the equivalent of R744 million in December 2018 and paid the CBN resolution
amount on 4 January 2019.
9. GHANA INITIAL PUBLIC OFFERING
During the current year, Scancom PLC (MTN Ghana) completed an initial public offering of its shares which resulted
in a change in the group's shareholding in the company. MTN Ghana issued 1 530 474 360 shares for localisation
as part of the public offering which resulted in a change in the group's shareholding from 97,65% to 85,49%.
The investment in MTN Ghana is held by Investcom Consortium Holdings S.A. and MTN (Dubai) Limited, which are
indirect subsidiaries of the group. Proceeds generated from the sale of shares, net of transaction costs,
amounted to GHS1 096 million (R3 057 million) which has been included in cash flows from financing activities.
The share allocation was finalised on 29 August 2018. This was a transaction with shareholders and had no
impact on profit or loss.
10. NIGERIA REGULATORY FINE
On 10 June 2016, MTN Nigeria resolved the matter relating to the previously imposed regulatory fine with the
Federal Government of Nigeria (FGN).
In terms of the settlement agreement reached on 10 June 2016, MTN Nigeria agreed to pay a total cash amount
of N330 billion over three years (the equivalent of R25,1 billion1) to the FGN as full and final settlement
of the matter.
The regulatory fine was fully expensed in 2016. A discount unwind of R812 million (2017: R1,0 billion) was
recognised in finance costs during the current year relating to the outstanding liability. The balance of the
liability amounts to R4,2 billion (2017: R6,6 billion) after taking into account the payment of N55 billion
(R1,8 billion2) on 28 March 2018, the payment of N55 billion (R2,2 billion3) on 28 December 2018 and the
unwinding of the interest.
1 Amount translated at the 10 June 2016 rate R1 = N13,15.
2 Amount translated at the 28 March 2018 rate R1 = N30,61.
3 Amount translated at the 28 December 2018 rate R1 = N25,33.
11. IMPAIRMENT OF GOODWILL
Goodwill is tested annually for impairment, the recoverable amounts of CGUs were determined based on value
in use calculations, where future cash flows were estimated and discounted. The discount rates and the perpetuity
growth rates used in the value in use calculations of the operations impacted by impairment are as follows:
December 2018 December 2017
Growth Discount Growth Discount
rate rate rate rate
% % % %
MTN Yemen 5,0 29,2 9,0 31,7
In a number of the group's operations in the MENA region, the socio-political instability experienced in these
markets resulted in suppressed revenue growth and lower operating margins in the current year, resulting in
decreased forecast cash flows at 31 December 2018. An impairment charge amounting to R312 million
(2017: R807 million) was recognised against the goodwill of MTN Yemen. MTN Yemen continued to be plagued
by political instability and subdued economic conditions. As at 31 December 2018, the carrying value of
this CGU exceeded its recoverable amount, necessitating an impairment charge (disclosed above). The goodwill
balance for MTN Yemen at 31 December 2018 amounts to R1 123 million, after recognising a cumulative impairment
charge of R1 119 million.
12. NET FINANCE COSTS
2018 2017
Rm Rm
Interest income on loans and receivables 1 120 2 109
Interest income on bank deposits 872 1 379
Finance income 1 992 3 488
Interest expense on financial liabilities measured at amortised cost1 (8 422) (8 400)
Net foreign exchange losses (1 901) (4 355)
Finance costs (10 323) (12 755)
Net finance costs recognised in profit or loss (8 331) (9 267)
1 R812 million (2017: R1,0 billion) relates to the discount unwind on the MTN Nigeria regulatory
fine liability.
13. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES AFTER TAX
2017
2018 Restated1
Rm Rm
(527) 840
Iran (281) 930
Others (246) (90)
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
During March 2018, International Digital Services Middle East Limited (iME) issued shares to a new
investor. The group and Iran each owned a 33,3% shareholding in iME prior to this transaction.
After the new investor was introduced, the group and Iran's shareholding decreased to 29,5% each.
The group recognised a R304 million gain on dilution, which is included in other income. The group's
share of Iran's gain on dilution (R134 million) is included in the share of results of associates and
joint ventures after tax.
During December 2018, Africa Internet Holdings GmbH (AIH) issued shares to a new investor. After the
new investor was introduced, the group's shareholding decreased to 29,69%. The group recognised a
R265 million gain on dilution, which is included in other income.
For the year ended 31 December 2018, outstanding dividends of R1 296 million (2017: R6 509 million)
was received from Iran.
Iran exchange rates and sanctions
In August 2018, the Central Bank of Iran (CBI) clarified that all future dividends can be expected
to be repatriated at the SANA rate (note 20). After the introduction of the SANA rate, the group
equity accounts the results and translates any receivable from Iran at the SANA rate. However, the
group continues to translate any receivables that have been approved by the Iranian government under
the Foreign Investment Promotion and Protection Act (FIPPA) at the CBI rate on the basis that management
expects these balances to be settled at the CBI rate.
On 8 May 2018, the US announced its decision to withdraw from the Joint Comprehensive Plan of Action
(JCPOA) agreement and to reimpose economic sanctions against Iran. The first round of these sanctions
became effective on 7 August 2018 and a second phase of sanctions became effective on 5 November 2018.
The sanctions may limit the ability of the group to repatriate cash from Iran, including future dividends.
As at 31 December 2018, Iranian rial-denominated receivables2 amounted to R1 031 million and
Iranian-rial denominated loan3 amounted to R1 730 million. Sanctions may place pressure on the Iranian
rial exchange rate that is used to translate these receivables as well as the equity-accounted results
of Iran.
2 Translated at SANA rate.
3 Translated at CBI rate.
14. EARNINGS PER ORDINARY SHARE
2018 2017
Number of ordinary shares
Number of ordinary shares in issue
At end of the year (excluding MTN Zakhele
Futhi and treasury shares) 1 797 642 541 1 797 451 094
Weighted average number of shares 1 797 602 678 1 797 414 442
Add: Dilutive shares
- Share options - MTN Zakhele Futhi 22 966 591 28 535 814
- Share schemes 3 870 043 3 064 710
Shares for dilutive earnings per share 1 824 439 312 1 829 014 966
Treasury shares
Treasury shares of 9 791 839 (2017: 9 983 286) are held by the group and 76 835 378 (2017: 76 835 378)
are held by MTN Zakhele Futhi (RF) Limited (MTN Zakhele Futhi).
Headline earnings
Headline earnings is calculated in accordance with Circular 4/2018 Headline Earnings as issued by
the South African Institute of Chartered Accountants.
2017
2018 Restated1
Rm Rm
Basic headline earnings per share
Reconciliation between net profit attributable to the
equity holders of the company and headline earnings:
Profit attributable to equity holders of the company 8 719 4 416
Loss/(profit) on disposal of property, plant and 20 (11)
equipment and intangible assets
- Subsidiaries (IAS 16) 44 (8)
- Joint ventures (IAS 28) (24) (3)
Profit on disposal of subsidiary (IFRS 10) (2 112) -
Impairment of goodwill (IAS 36) 312 2 631
Net impairment (reversal)/loss on property, plant and (206) 3 045
equipment and intangible assets (IAS 36)
Net gain on dilution of investment in associate and joint venture (703) (28)
(IAS 28)
- Subsidiaries (569) (28)
- Joint ventures (134) -
Realisation of deferred gain on disposal of (23) (27)
non-current assets held for sale (IFRS 5)
Profit on derecognition of equity-accounted - (6 017)
investment (IAS 28)
Total tax effects of adjustments 6 (189)
Total non-controlling interest effect of adjustments 42 (541)
Basic headline earnings 6 055 3 279
Earnings per share (cents)
- Basic 485 246
- Basic headline 337 182
Diluted earnings per share (cents)
- Diluted 478 241
- Diluted headline 332 179
1 Restated for changes in accounting policies, refer to note 25 for details of the restatements.
15. FINANCIAL INSTRUMENTS
Financial instruments at amortised cost
The group has not disclosed the fair values of financial instruments measured at amortised cost except
for the borrowings set out below, as their carrying amounts closely approximate their fair values.
Listed long-term borrowings
The group has listed long-term fixed interest rate senior unsecured notes in issue which were issued
in prior years, with a carrying amount of R25 380 million (2017: R21 765 million) and a fair value of
R23 926 million (2017: R22 434 million). The fair values of these instruments are determined by
reference to quoted prices on the Irish bond market. The market for these bonds is not considered
to be liquid and consequently the fair value measurement is categorised within level 2 of the fair
value hierarchy.
Financial instruments measured at fair value
The fair values of financial instruments measured at fair value are determined as follows:
Treasury bills
The fair value of these investments is determined by reference to published price quotations in an
active market. In 2017, the group has classified treasury bills with a carrying amount of R343 million
as available-for-sale and the group has classified treasury bills with a carrying amount of R307 million
as at fair value through profit or loss. The fair value of these investments is categorised within
level 1 of the fair value hierarchy.
Fair value measurement of investment in IHS Group
Included in investments in the summary group statement of financial position is an equity investment in
IHS Group at fair value of R23 353 million (2017: R27 045 million). At 31 December 2018, the absence of
transactions between market participants resulted in the fair value being determined using models considered
to be appropriate by management. The fair value was calculated using an earnings multiple technique and was
based on unobservable market inputs including tower industry earnings multiples of between 10x to 15x
(2017: 13x to 17x) applied to MTN management's estimates of earnings, less estimated net debt of
R18 599 million (2017: R17 117 million). In addition, in 2018 the group has applied a 10% liquidity discount.
Given the confidentiality restrictions in the shareholders' agreement with IHS Group, MTN does not have
access to the IHS Group business plans or 2018 actual financial information. Any estimated earnings used
to derive the existing fair value are therefore solely based on MTN management assumptions and market
estimates on financial growth, currency movements, costs and performance. The investment has therefore
been classified as level 3 of the fair value hierarchy for the current reporting period. An increase of
one in the low and high end of the multiple range, keeping other inputs constant, would have resulted in
an increase in the fair value of R2 316 million and a decrease of one in the low and high end of the
multiple range, keeping other inputs constant, would have resulted in a decrease in the fair value of
R2 316 million (2017: R2 148 million). An increase of 10% in the estimated earnings used, keeping other
inputs constant, would have resulted in an increase in the fair value of R2 821 million and a decrease
of 10% in the estimated earnings used, keeping other inputs constant, would have resulted in a decrease
in the fair value of R2 821 million (2017: R3 021 million). An increase of 1% to the liquidity discount,
keeping other inputs constant, would have resulted in a decrease in the fair value of R259 million and a
decrease of 1% to the liquidity discount, keeping other inputs constant, would have resulted in an increase
in the fair value by R259 million as at 31 December 2018.
A decrease of R7 770 million (2017: R4 249 million increase) has been recognised for the year under review in
other comprehensive income resulting from the change in fair value.
Reconciliation of level 3 financial assets
The table below sets out the reconciliation of financial assets that are measured at fair value based on
inputs that are not based on observable market data (level 3):
Rm
Balance at 1 January 2017(1) 380
Transfers from level 2 (IHS Group) 11 240
Acquisitions 132
Exchange right exercised (IHS Group) 13 767
Gain on available-for-sale investments 4 439
Foreign exchange differences (2 272)
Balance at 1 January 2018 27 686
Acquisitions 310
Loss on equity investments at fair value through other comprehensive income (8 030)
Foreign exchange differences 4 059
Balance at 31 December 2018 24 025
(1) Refer to note 25 for changes in accounting policies.
16. AUTHORISED COMMITMENTS FOR THE ACQUISITION OF PROPERTY, PLANT, EQUIPMENT AND SOFTWARE
2018 2017
Rm Rm
28 790 27 747
- Contracted 10 280 6 958
- Not contracted 18 510 20 789
17. INTEREST-BEARING LIABILITIES
2018 2017
Rm Rm
Bank overdrafts 255 72
Current borrowings 12 183 9 081
Current liabilities 12 438 9 153
Non-current borrowings 72 563 70 567
85 001 79 720
18. ISSUE AND REPAYMENT OF DEBT AND EQUITY SECURITIES
During the year under review the following entities raised and repaid significant debt instruments:
2018 2018 2017 2017
Rm Rm Rm Rm
Raised Repaid Raised Repaid
Mobile Telephone 11 750 6 320 16 007 16 865
Networks Holdings
Limited
Loan facilities 3 500 563 5 100 7 159
General banking 6 500 5 450 5 650 6 825
facilities
Domestic medium-term 1 750 307 5 257 2 881
programme
MTN International 3 753 8 070 1 382 1 352
(Mauritius) Limited
MTN Nigeria 4 770 8 101 2 187 4 275
Communications
Limited
Other 4 946 4 868 3 711 2 114
25 219 27 359 23 287 24 606
19. CONTINGENT LIABILITIES
2018 2017
Rm Rm
Uncertain tax exposures 2 087 8 667
Legal and regulatory matters 2 660 1 180
4 747 9 847
Uncertain tax exposures
The group operates in numerous tax jurisdictions and the group's interpretation and application of the
various tax rules applied in direct and indirect tax filings may result in disputes between the group
and the relevant tax authority. The outcome of such disputes may not be favourable to the group.
At year-end, there were a number of tax disputes ongoing in various of the group's operating entities,
the most significant of which relates to a transfer pricing dispute which the group is contesting.
At 31 December 2018, the contingency for the transfer pricing assessment has been significantly reduced,
following the group's review of the tax authority's submissions made in the course of preparing for
litigation. Based on internal and external legal and technical advice obtained, the group remains
confident that it has a strong legal case to contest the remaining exposure.
Legal and regulatory matters
The group is involved in various legal and regulatory matters, the outcome of which may not be favourable
to the group and none of which are considered individually material.
The group has applied its judgement and has recognised liabilities based on whether additional amounts
will be payable and has included contingent liabilities where economic outflows are considered possible
but not probable.
20. EXCHANGE RATES
Closing rates Average rates
2018 2017 2018 2017
Foreign currency
to South African
rand:
United States
dollar USD 14,38 12,39 13,21 13,34
South African
rand to foreign
currency:
Nigerian naira NGN 25,33 29,05 27,41 24,61
Iranian rial IRR 6 043,73(1) 2 893,16(2) 4 020,06(3) 2 493,01(2)
Ghanaian cedi GHS 0,34 0,36 0,36 0,33
Cameroon
Communaute
Financière
Africaine franc XAF 39,89 44,44 45,07 44,06
Côte d'lvoire
Financière
Africaine franc CFA 39,80 45,50 42,73 43,92
Ugandan shilling UGX 257,93 293,68 280,55 270,09
Syrian pound SYP 30,45 35,18 32,79 37,76
Sudanese pound SDG 3,31 1,61 2,40 0,55
(1) SANA rate.
(2) CBI rate.
(3) Weighted average exchange rate used to translate the results of Iran.
At 31 December 2018, the ZAR to IRR exchange rate based on the CBI rate was ZAR1 = IRR2 919,91.
The group's presentation currency is rand. The weakening of the closing rate in the rand against the
functional currencies of the group's largest operations contributed to the increase in consolidated
assets and liabilities and the resulting foreign currency translation reserve increase of R1 943 million
(2017: R12 417 million reduction) for the year.
Net investment hedges
The group hedges a designated portion of its dollar net assets in MTN (Dubai) Limited (MTN Dubai) for
forex exposure arising between the USD and ZAR as part of the group's risk management objectives. The
group designated external borrowings (Eurobonds) denominated in US$ held by MTN (Mauritius) Investments
Limited (MTN Mauritius) with a value of R23,9 billion (2017: R22,4 billion) and external borrowings
denominated in US$ held by MTN Nigeria with a value of R1,3 billion (2017: R2,6 billion) as hedging
instruments. For the period of the hedge relationship, foreign exchange movements on these hedging
instruments are recognised in other comprehensive income as part of the foreign currency translation
reserve (FCTR), offsetting the exchange differences recognised in other comprehensive income, arising
on translation of the designated dollar net assets of MTN Dubai to ZAR. The cumulative forex movement
recognised in other comprehensive income will only be reclassified to profit or loss upon loss of
control over MTN Dubai. There was no hedge ineffectiveness recognised in profit or loss during the
current or prior year.
21. RELATED PARTY TRANSACTIONS
Transactions between members of the group
MTN Ghana entered into operating lease agreements with Ghana Tower InterCo B.V in prior years.
The operating lease commitments amount to R9 468 million (2017: R8 446 million). The expense
recorded amounted to R1 016 million for the year ended 31 December 2018 (2017: R627 million).
The rental amounts escalate every year by inflation and the initial term is 10 years, followed
by four times five-year renewal periods.
MTN Uganda Limited entered into operating lease agreements with Uganda Tower InterCo B.V in prior years.
The operating lease commitments amount to R1 988 million (2017: R1 636 million). The expense recorded
amounted to R439 million for the year ended 31 December 2018 (2017: R558 million). The rental amounts
escalate every year by inflation and the initial term is 10 years, followed by four times five-year
renewal periods.
Transaction with an entity associated with a director
On 29 June 2018, the group and Mainstreet 1561 Proprietary Limited, a wholly-owned company of PF Nhleko,
Non-Executive Chairman of MTN Group, agreed not to proceed with the sale of 14 750 000 MTN Zakhele Futhi
shares. This is regarded as a cancellation of a share-based payment transaction. The related receivable
from Mainstreet 1561 Proprietary Limited was derecognised with a corresponding debit in equity. There was
no profit or loss impact arising from the cancellation.
22. BENIN FREQUENCY FEES
Spacetel Benin S.A. (MTN Benin) and the government of Benin concluded a memorandum of understanding (MOU)
in April 2018 which includes the settlement of historical frequency fees, a five-year licence extension
and the addition of optical fibre to the existing licence conditions settled by the payment of CFA35 billion
(R802 million) in May 2018 and a second payment of CFA35 billion (R857 million) in February 2019. MTN Benin
and the government of Benin reached an agreement regarding ongoing frequency fees, which was subsequently
confirmed by the issue of a decree specifying the frequency fees calculation.
The decree has confirmed the calculation methodology for allocating a portion of the payment to past
frequency fees. This resulted in the recognition of an intangible asset of CFA55,2 billion
(R1 370 million) relating to the extended licence and the right to deploy optical fibre.
23. NON-CURRENT ASSETS HELD FOR SALE
In December 2018, the group received an unsolicited offer to sell its interest in Mascom Wireless
Botswana Proprietary Limited and its holding companies. Accordingly, the investment in joint venture
and related assets in holding companies have been presented as non-current assets held for sale.
Any transactions will be subject to the execution of definitive transaction agreements and applicable
governance and regulatory approvals. The sale is expected to be concluded in the first half of 2019.
2018
The assets held for sale as at 31 December 2018 are: Rm
Investment in joint venture 1 832
Intangible and other non-current assets 312
Cash and cash equivalents1 615
2 759
1 Cash and cash equivalents will be distributed to the group, prior to the conclusion of the sale.
24. EVENTS AFTER REPORTING PERIOD
Dividends declared
Dividends declared at the board meeting held on 6 March 2019 amounted to 325 cents per share.
Iran receivable
MTN Mauritius and Iran signed an agreement in February 2019, to convert Iranian rial-denominated
receivables amounting to R505 million, owed by Iran, into a loan. The loan has a two-year term and
accrues interest at 18% per annum.
25. CHANGES IN ACCOUNTING POLICIES
The group has adopted the following new accounting pronouncements as issued by the International
Accounting Standards Board (IASB), which were effective for the group from 1 January 2018:
- IFRS 15 Revenue from Contracts with Customers (IFRS 15); and
- IFRS 9 Financial Instruments (IFRS 9).
The group also implemented a voluntary accounting policy change relating to a change in the presentation
of cash flows. The changes in accounting policies were applied retrospectively. Comparative numbers
have been restated for the adoption of IFRS 15 and the change in the presentation of cash flows.
25.1 Adoption of IFRS 15
The group principally generates revenue from providing mobile telecommunications services, such as
network services (comprising of data, voice and SMS), digital and fintech services, interconnect and
roaming services, as well as from the sale of mobile devices. Products and services may be sold separately
or in bundled packages. The typical length of a contract for postpaid bundled packages is 24 months.
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue
is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations.
Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity
expects to be entitled for transferring goods or services to a customer.
Revenue is measured based on the consideration specified in a contract with a customer and excludes
amounts collected on behalf of third parties. The group recognises revenue when it transfers control
over a product or services to a customer.
For bundled packages, the group accounts for individual products and services separately if they are
distinct, i.e. if a product or service is separately identifiable from other items in the bundled
package and if a customer can benefit from it. The consideration is allocated between separate products
and services in a bundle based on their standalone selling prices. The standalone selling prices are
determined based on the list prices at which the group sells mobile devices and network services
separately.
On adoption of IFRS 15, the group restated its retained earnings at 1 January 2017 as follows:
2017
Notes Rm
Retained earnings - as previously reported 64 831
Earlier recognition of mobile device revenue 25.1.1 1 177
Earlier recognition of breakage 25.1.2 180
Capitalisation of subscriber acquisition costs 25.1.4 694
Increase in current and deferred tax liabilities (566)
Less: Non-controlling interests portion (38)
Adjustment to retained earnings on adoption of IFRS 15 1 447
Opening retained earnings 1 January - IFRS 15 66 278
The nature of the changes in the accounting policies were as follows:
Nature, timing of
Type of satisfaction of
product/ performance obligations, Nature of change in
service significant payment terms accounting policy Impact
25.1.1 Mobile The group recognises Earlier recognition of mobile This has resulted
devices revenue when the device revenue in an increase of
customer takes The group previously the transaction
possession of the device. anticipated early contract price in postpaid
For mobile devices sold upgrades and based the contracts and an
separately, customers subscriber contract period increase in
pay in full at the point of on the expected term and revenue allocated
sale. For mobile devices accounted for any to devices.
sold in bundled consideration received As device revenue
packages, customers beyond the anticipated has increased and
usually pay monthly in upgrade period as network is recognised
equal instalments over a services revenue as it was upfront, this has
period of 24 months. earned (mainly in its South resulted in a
African operation). larger contract
Following the adoption of asset balance that
IFRS 15, the group bases is impaired when
the subscriber contract customers default
period on the contractual on payments on
term and accounts for early their postpaid
upgrades as contract contract, i.e. an
modifications. The effect increase in
of the modification is that impairment of
the contract asset at trade receivables
modification date is treated and contract
as a payment to a customer assets.
and results in a reduction of
the revenue from the
subsequent contract.
The group assesses The group recognises This has resulted
postpaid contracts interest revenue and a in lower revenue
including handsets reduction in device revenue recognised upfront
to determine if they on transactions with a on the devices and
contain a significant significant financing the recognition of
financing component. The component where the period interest revenue
group has elected to between the transfer of over the contract
apply the practical handsets and the subscriber period.
expedient that allows the payment period exceeds
group not to adjust the 12 months.
transaction price for the
significant financing
components for contracts
where the time difference
between customer
payment and transfer of
goods or services is
expected to be one year
or less. The group
recognises significant
financing components as
interest revenue over the
period between satisfying
the related performance
obligation and payment.
25.1.2 Mobile Mobile telecommunication Earlier recognition of This has resulted
telecom- services include network breakage in revenue from
munication services and digital and Previously, the group only breakage being
services fintech services. The accounted for breakage recognised earlier
group recognises revenue when it became remote that and therefore an
from these services as customers would use these increase in
they are provided. services. revenue and a
When the group expects decrease in
to be entitled to breakage unearned revenue
(forfeiture of unused (which is now
value or network named contract
services), the group liabilities).
recognises the expected
amount of breakage in
proportion to network
services provided versus
the total expected
network services to be
provided. Any unexpected
amounts of breakage are
recognised when the
unused value of network
services expire or when
usage thereof becomes
remote.
25.1.3 Interconnect Interconnect and roaming The historical pattern of late This change has
and roaming revenue and debtors are payments (i.e. customary resulted in a
recognised as the service business practice) should be reduction of
is provided, unless it is not taken into account in interconnect and
probable on transaction measuring interconnect and roaming revenue
date that the interconnect roaming revenue. and an increase in
revenue will be received, interest revenue
in which case over the expected
interconnect revenue is payment period. As
recognised only when the this change mainly
cash is received or where affects an
a right of set-off exists equity-accounted
with interconnect parties operation, it has
in settling amounts. resulted in a
Payment for interconnect decrease in the
and roaming is generally share of results of
received on a monthly associates and
basis. Some interconnect joint ventures after
and roaming debtors have tax in 2017. There
a historical pattern of late was no change to
payment due to sanctions retained earnings
imposed. The group has at 1 January 2017
continued to provide as the group did
services to these debtors not restate for
(due to regulatory completed
requirements) where the contracts at
recovery of principal is 1 January 2017 per
significantly delayed note 25.1.5.
beyond the contractual
terms. The group has
considered this historical
payment pattern in
assessing whether the
contract contains a
significant financing
component.
25.1.4 Capitalisation of subscriber acquisition costs
IFRS 15 introduced specific guidance on accounting for incremental costs of obtaining contracts with
customers. Under IAS 18, the group expensed subscriber acquisition costs at inception of the contract.
The group expects that incremental subscriber acquisition costs for obtaining and renewing contracts are
recoverable. These costs include agents' commission on postpaid contracts and SIM activation costs on
prepaid contracts. The group has therefore capitalised these costs as contract costs. Capitalised contract
costs are amortised on a systematic basis over the average customer life and included in selling,
distribution and marketing expenses in profit or loss.
In terms of a practical expedient, the group has elected to recognise the incremental costs of obtaining
contracts as a selling, distribution and marketing expense in profit or loss, when incurred, if the
amortisation period of the assets that the group otherwise would have recognised is 12 months or less.
The impact of this change is a decrease in selling, distribution and marketing expenses and the recognition
of a new asset: capitalised contract costs.
25.1.5 Transition to IFRS 15
In accordance with the transition provisions in IFRS 15, the group has adopted the new rules retrospectively
and has restated comparative numbers for the 2017 financial year. The group applied the following practical
expedients when applying IFRS 15 retrospectively:
- The group did not restate comparative numbers for contracts that were completed contracts at 1 January 2017;
- The group did not restate comparative numbers for contracts that began and ended in the same annual
reporting period; and
- For modified contracts, the group used the contractual terms that existed at 1 January 2017.
25.2 Adoption of IFRS 9
The adoption of IFRS 9 had the following impact on the group:
- Change from the IAS 39 Financial Instruments: Recognition and Measurement (IAS 39) incurred loss model
to the expected credit loss (ECL) model to calculate impairments of financial instruments; and
- Change in classification of the measurement categories for financial instruments.
More detail on the impact from the adoption of IFRS 9 is provided below.
25.2.1 Impairment
Before the adoption of IFRS 9, the group calculated the allowance for credit losses using the incurred loss
model. Under the incurred loss model, the group assessed whether there was any objective evidence of
impairment at the end of each reporting period. If such evidence existed the allowance for credit losses
in respect of financial assets at amortised cost were calculated as the difference between the asset's
carrying amount and its recoverable amount, being its present value of the estimated future cash flows
discounted at the original effective interest rate (EIR).
Under IFRS 9 the group calculates the allowance for credit losses based on ECLs for financial assets
measured at amortised cost, debt investments at fair value through other comprehensive income (FVOCI)
and contract assets. ECLs are a probability weighted estimate of credit losses. Credit losses are measured
as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the group in
accordance with the contract and the cash flows that the group expects to receive). ECLs are discounted at
the original EIR of the financial asset.
The group applies the simplified approach to determine the ECL for trade receivables and contract assets.
This results in calculating lifetime ECLs for these trade receivables. ECL for trade receivables is
calculated using a provision matrix. For contract assets and mobile trade receivables ECLs are determined
using a simplified parameter-based approach.
Provision matrix - ECLs are calculated by applying a loss ratio to the aged balance of trade receivables
at each reporting date. The loss ratio is calculated according to the ageing/payment profile of sales by
applying historical/proxy write-offs to the payment profile of the sales population. In instances where
there was no evidence of historical write-offs management used a proxy write-off. Trade receivable
balances have been grouped so that the ECL calculation is performed on groups of receivables with
similar risk characteristics and ability to pay. Similarly, the sales population selected to determine
the ageing/payment profile of the sales is representative of the entire population and in line with
future payment expectations. The historical loss ratio is then adjusted for forward looking information
to determine the ECL for the portfolio of trade receivables at the reporting date to the extent that
there is a strong correlation between the forward looking information and the ECL.
Simplified parameter-based approach - ECL is calculated using a formula incorporating the following
parameters: exposure at default (EAD), probability of default (PD), loss given default (LGD) discounted
using the EIR (i.e. PD x LGD x EAD = ECL). Exposures are mainly segmented by customer type i.e. corporate,
consumer etc., ageing, device versus SIM only contracts and months in contract. This is done to allow for
risk differentiation. The probability of a customer defaulting as well as the realised loss with defaulted
accounts has been determined using historical data (12 months and 36 months respectively). The EIR represents
a weighted average rate incorporating a risk-free rate plus a risk premium on initial recognition of the
trade receivables.
25.2.2 Classification, initial recognition and subsequent measurement
IFRS 9 introduces new measurement categories for financial assets. The measurement categories of IFRS 9
and IAS 39 is illustrated in the table below. From 1 January 2018 the group classifies financial assets
in each of the IFRS 9 measurement categories based on the group's business model for managing the
financial asset and the cash flow characteristics of the financial asset.
IAS 39 category IFRS 9 category
Financial assets at fair value through Financial assets at FVTPL
profit or loss (FVTPL)
Loans and receivables Financial assets at amortised cost
Available-for-sale Investments at FVOCI*
Held-to-maturity
* This includes both debt and equity instruments. The biggest change is that on derecognition of equity
instruments, gains or losses accumulated in OCI are not reclassified to profit or loss.
The reclassification into the new measurement categories of IFRS 9 did not have a significant impact on
the group. The group has designated the investment in IHS Group and other unlisted equity investments as
at FVOCI, as these instruments are not held for trading. Additionally, some of the group's treasury bills
are held with a business model to collect and sell and consequently have been classified as FVOCI debt
instruments.
Financial liabilities are measured at amortised cost except for those designated as at FVTPL, which
are measured at fair value.
25.2.3 Transition to IFRS 9
Changes in accounting policies from the adoption of IFRS 9 have been applied retrospectively; however,
the group has elected to not restate comparative information. Differences between the carrying amounts as
at 31 December 2017 and 1 January 2018 resulting from the initial application of IFRS 9 are recognised
in retained earnings. Accordingly, information relating to 31 December 2017 does not reflect the
requirements of IFRS 9 but rather those of IAS 39.
The group has elected, as an accounting policy choice, to not adopt the hedge accounting requirements of
IFRS 9, but to continue applying the hedge accounting requirements of IAS 39.
25.3 Presentation of cash flows
During 2018, the group reviewed the classification of cash flows and aligned the external presentation of
cash flows with the internal presentation applied to manage the business and used for performance management.
The group voluntarily changed its accounting policy and reclassified:
- Dividends paid to equity holders of the company and non-controlling interests from cash flows from
operating activities to cash flows from financing activities; and
- Interest paid in the group's head office treasury function from cash flows from financing activities to
cash flows from operating activities.
Comparative numbers have been restated accordingly.
25.4 Impact on the financial statements
The following tables show the restatements recognised for each individual line item. Line items that were
not affected by the changes have not been included. As a result, the subtotals and totals disclosed cannot
be recalculated from the numbers provided. The adjustments are explained in more detail by standard below.
Year ended 31 December 2017
As
previously
reported IFRS 15 Restated
Income statement (extract) Notes Rm Rm Rm
Revenue 25.1.1; 132 815 54 132 869
25.1.2
Selling, distribution and marketing 25.1.4 (17 276) 82 (17 194)
expenses
Other operating expenses 25.1.1 (14 128) (120) (14 248)
Operating profit 20 557 16 20 573
Share of results of joint ventures and 25.1.3; 841 (1) 840
associates after tax 25.1.4
Profit before tax 9 555 15 9 570
Income tax expense (5 014) (6) (5 020)
Profit after tax 4 541 9 4 550
Attributable to:
Equity holders of the company 4 414 2 4 416
Non-controlling interests 127 7 134
Basic earnings per share (cents) 246 - 246
Diluted earnings per share (cents) 241 - 241
Year ended 31 December 2017
As
previously
reported IFRS 15 Restated
Statement of comprehensive income (extract) Rm Rm Rm
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translating (12 376) (41) (12 417)
foreign operations including the effect of
hyperinflation
Other comprehensive income for the (3 218) (41) (3 259)
year
Attributable to equity holders of the (2 664) (34) (2 698)
company
Attributable to non-controlling interest (554) (7) (561)
Total comprehensive income 1 323 (32) 1 291
Attributable to:
Equity holders of the company 1 750 (32) 1 718
Non-controlling interests (427) - (427)
31
December
2017 31
As December 1 January
previously 2017 2018
Statement of financial reported IFRS 15 Restated IFRS 9 Restated
position (extract) Notes Rm Rm Rm Rm Rm
Non-current assets
Investment in associates
and joint ventures 25.1.3; 19 610 63 19 673 (100) 19 573
25.1.4
Deferred tax and other
non-current assets 5 103 (612) 4 491 - 4 491
Contract assets - 25.1.1 - 828 828 (282) 546
non-current1
Capitalised contract costs1 25.1.4 - 708 708 - 708
Current assets
Trade and other receivables
and other current assets 25.1.1 41 515 880 42 395 (79) 42 316
Total assets 242 415 1 867 244 282 (461) 243 821
Total equity
Attributable to equity holders
of the company 92 773 1 415 94 188 (384) 93 804
Non-controlling interest 1 494 38 1 532 - 1 532
Non-current liabilities
Deferred tax and other
non-current liabilities 12 465 450 12 915 (77) 12 838
Current liabilities
Trade and other payables 25.1.2 45 718 138 45 856 - 45 856
Other current and
tax liabilities 10 245 (174) 10 071 - 10 071
Total equity and liabilities 242 415 1 867 244 282 (461) 243 821
1 These line items are included in the 'Deferred tax and other non-current assets' line item in
statement of financial position.
Year ended 31 December 2017
As Change in
previously accounting
reported policy Restated
Statement of cash flows (extract) Notes Rm Rm Rm
Net cash generated from operating activities 25.3 23 694 9 693 33 387
Dividends paid to equity holders of the company 25.3 (12 565) 12 565 -
Dividends paid to non-controlling interests 25.3 (956) 956 -
Interest paid 25.3 (3 409) (3 828) (7 237)
Net cash used in financing activities (4 919) (9 693) (14 612)
Repayment of borrowings 25.3 (28 434) 3 828 (24 606)
Dividends paid to equity holders of the company 25.3 - (12 565) (12 565)
Dividends paid to non-controlling interests 25.3 - ( 956) ( 956)
ADMINISTRATION
MTN GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number: 1994/009584/06
ISIN: ZAE000042164
Share code: MTN
Board of directors
PF Nhleko2
RA Shuter1#
RT Mupita1
PB Hanratty3$
A Harper3#
MH Jonas3 (appointed 1 June 2018)
KP Kalyan3
S Kheradpir3++
NP Mageza3
MLD Marole3
AT Mikati2+
SP Miller3^
KD Mokhele3 (appointed 1 July 2018)
KC Ramon3
NL Sowazi3
BS Tshabalala3 (appointed 1 June 2018)
J van Rooyen3
1 Executive
2 Non-executive
3 Independent non-executive director
++ American
+ Lebanese
# British
$ Irish
^ Belgian
Group secretary
SB Mtshali
Private Bag X9955, Cresta, 2118
Registered office
216 - 14th Avenue, Fairland, 2195
American depository receipt (ADR) programme
Cusip No. 62474M108
ADR to ordinary share 1:1
Depository
The Bank of New York
101 Barclay Street, New York NY. 10286, USA
MTN Group sharecare line
Toll free: 0800 202 360 or +27 11 870 8206
if phoning from outside South Africa
Transfer secretaries
Computershare Investor Services Proprietary Limited
Registration number 2004/003647/07
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196
PO Box 61051, Marshalltown, 2107
Joint auditors
PricewaterhouseCoopers Inc.
4 Lisbon Lane, Waterfall City, Jukskei View, 2090
SizweNtsalubaGobodo Grant Thornton Inc.
20 Morris Street East
Woodmead, 2191
PO Box 2939, Saxonwold, 2132
Lead sponsor
JP Morgan Equities (SA) Proprietary Limited
1 Fricker Road, cnr Hurlingham Road, Illovo, 2196
Joint sponsor
Tamela Holdings Proprietary Limited
Ground Floor, Golden Oak House, Ballyoaks Office Park
35 Ballyclare Drive, Bryanston, 2021
Attorneys
Webber Wentzel
90 Rivonia Road, Sandton, 2196
PO Box 61771, Marshalltown, 2107
Contact details
Telephone: National 083 912 3000
011 912 3000
International +27 83 912 3000
Facsimile: National 011 912 4093
International +27 11 912 4093
E-mail: investor.relations@mtn.com
Website: http://www.mtn.com
Date of release: 7 March 2019
Date: 07/03/2019 07:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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