MTN - Quarterly update for the period ended 30 September 2020
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(“MTN” or “the group”)
Quarterly update for the period ended 30 September 2020
MTN is an emerging market mobile operator with a clear vision to lead the delivery of a bold, new
digital world. We have 273 million customers in 21 markets and are inspired by our belief that
everyone deserves the benefits of a modern connected life.
• Subscribers increased by 12 million to 273,4 million
• Active data subscribers increased by 5,3 million to 107,2 million
• Active MTN Mobile Money (MoMo) customers increased by 3,5 million to 41,8 million
• Group service revenue increased by 11,4%
• Group earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved to
43,3% (from 41,9%)
• MTN South Africa service revenue increased by 2,1%, with an EBITDA margin of 39,3% (from
• MTN Nigeria service revenue increased by 13,8%, with an EBITDA margin of 51,0% (from
Unless otherwise stated, financial growth rates are presented on a constant currency basis and are year-on-year (YoY,
9M to September 2020 vs 9M to September 2019). Non-financial growth rates are presented as quarter-on-quarter
(QoQ, 3Q20 vs 2Q20).
Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access data and excludes roaming and wholesale.
Fintech includes MoMo, insurance, airtime lending and e-commerce. Active data users is a count of all subscribers at a point in time which
had a revenue generating event in the specified period of time (90 days) prior to that point in time and also during the past 30 days had data
usage greater than or equal to 5 megabytes. MoMo users are 30-day active users.
Group president and CEO, Ralph Mupita comments:
“As the Covid-19 pandemic has continued to impact lives and livelihoods across our markets, the group
has demonstrated strong operational execution and resilience during the period under review.
Although trading conditions remain challenging, we delivered a solid performance in Q3 2020 during
which the positive momentum achieved in key traffic and revenue trends towards the end of H1 2020
We continued to drive good growth in our subscriber base, enabled by strong commercial execution
across our markets. In the quarter we added 12 million subscribers and 5,3 million active data users.
We reached a significant milestone in our goal to enable greater financial inclusion by surpassing the
40 million MoMo subscribers mark, an addition of 3,5 million in the quarter. In Nigeria, we added over
90 000 agents to end Q3 at 311 770 registered agents for our fintech business. Apart from greater
adoption brought on by COVID-19, more people used MoMo because of enhancements to the
functionality of the MoMo app, the large increase in registered MoMo agents, as well as the
integration of MoMo into our instant messaging platform Ayoba in some of our markets.
Service revenue grew by 11,4% and EBITDA grew by 13,9%, with the group EBITDA margin improving
by 1,4pp to 43,3%, in line with our medium-term targets. Group leverage remains comfortably within
covenant limits and improved to 0,9x, from 1,1x at June 2020. Although our group holding company
(holdco) leverage continues to be impacted by timing delays in upstreaming from key operating
companies, it improved slightly to 2,6x from 2,7x at June 2020. As lockdown restrictions interrupted
new network rollout, particularly in Q2, we continued to focus our investment of R16,1 billion on
network capacity and resilience and modernising our IT systems. Pleasingly, we were able to accelerate
some of our investment as lockdown restrictions eased.
The group results were supported by the strong performance of our larger operations. MTN South
Africa sustained its turnaround, with an acceleration in its core consumer and enterprise business units
in Q3. MTN Nigeria recorded a solid result with some recovery in revenue growth under difficult
operating conditions, and MTN Ghana’s continued strong operational execution drove the delivery of
another good performance.
We recorded solid growth in voice revenue of 3,9%, which reflects an encouraging recovery supported
by the easing of lockdown restrictions and the gradual reopening of the economies in our markets.
Data revenue grew by 31,9%, bolstered by increased demand for work from home services, digital
entertainment as well as online education offerings. We also delivered pleasing growth in fintech and
digital revenue of 21,0% and 37,5% respectively, driven by increased adoption and usage of our digital
channels and offerings.
As we continue to navigate the impacts of the pandemic, we remain focused on our people, customers,
networks and efficiency, supporting our broad range of stakeholders through our Y’ello Hope and other
initiatives. While managing the risks, we are also alive to the opportunities presented by COVID-19,
particularly the accelerated need for digitalisation evidenced in the adoption and usage of our services.
Our balance sheet and liquidity position is supported by our focus on prudent capital allocation.
We have completed the exit from our 18,9% investment in Jumia as well as the localisation of an 8%
shareholding in MTN Zambia, realising net proceeds of approximately R2,3 billion and R204 million
Looking ahead, we remain committed to providing leading network service; building and scaling our
digital and fintech businesses; securing greater efficiency through cost discipline; and executing on our
pan-African strategy and asset realisation programme.
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.
MTN South Africa
MTN SA delivered an encouraging performance, with strong commercial execution sustaining the
growth of consumer prepaid, consumer postpaid and enterprise business units. Service revenue grew
by 2,1% with an improved performance in Q3, when it increased by 11,8% YoY.
Service revenue growth was supported by the strong performance in the consumer prepaid business,
continued growth of the enterprise business and the resilience of the consumer postpaid business. All
three business units continue to benefit from the growth in data usage driving the increase in data
revenue by 16,0% YoY in the nine months to September 2020.
MTN SA’s results were negatively impacted by the discontinuation of our roaming agreement with
Telkom which concluded in June 2019 and the effect of accounting for Cell C roaming revenue on a
cash basis. Excluding the impact of national roaming, MTN SA would have recorded service revenue
growth of 3,4% in the first nine months of the year and 5,7% YoY in Q3.
Total subscribers increased by 1,9 million in the quarter, to 30,9 million. The majority of additions
were prepaid customers, reaching a total of 24,3 million and marking the largest quarterly increase in
nearly 18 months. Postpaid subscriber numbers remained broadly flat at 6,6 million, primarily as a
result of churn on short-term COVID-19 related deals. Excluding the net impact of these deals, the
postpaid subscriber base increased 168 100 for the quarter.
Strong data traffic growth of 80,6% coupled with a 0,5 million increase in active data users to 14,7
million supported a solid 16,0% increase in overall mobile data revenue. In line with the commitment
to improving the affordability of data for its customers, MTN SA has reduced its effective data tariff
by approximately 34,7% since September 2019.
The execution of MTN SA’s prepaid strategy resulted in a solid performance in the consumer prepaid
business, which remained on an improving trajectory with service revenue up 3,1%, benefiting from a
strong third quarter when service revenue increased by 5,7% YoY. The business benefited from
increased data usage and customer additions as well as an increased uptake in data packages as it
focuses on affordability and customer value management (CVM) initiatives.
The consumer postpaid business recorded a 3,1% growth in service revenue, achieved in a highly
competitive environment. The business benefited from efforts to reduce churn as well as Data First
(Mega Deals) offers driving uptake of data-rich contracts.
The enterprise business continued recording growth for the fourth consecutive quarter. Service
revenue was up 17,2%, boosted by customised data deals for universities to facilitate ‘learn from
home’ initiatives as well as the uptake of ‘work from home’ solutions. As these deals were on a short-
term basis, there was a slowdown in the quarter reflecting the university churn, however the focus
remains on base retention as well as on adding new corporate customers.
Wholesale revenue declined by 14,4%, impacted by the lost national roaming revenue from the
discontinuation of the agreement with Telkom and the effect of continuing to account for Cell C
revenue on a cash basis. MTN SA recognised approximately R1,3 billion in national roaming revenue
in the nine months to 30 September 2020 (taking into consideration that no Cell C revenue was
recognised in Q3 2019), while R698 million of Cell C revenue remained unrecognised as at
September 2020. The implementation continues of Phase 2 of the Cell C roaming agreement, which
commenced on 1 May 2020.
MTN SA produced a solid EBITDA margin of 39,3%, expanding by 2,7pp, aided by the reductions in
device volumes and subsidies, execution of the cost efficiency programme as well as channel
Since launching MoMo in South Africa in January 2020, this service continues to scale, with
approximately 2,0 million registered users at 30 September 2020. The focus remains on growing the
platform through innovative and relevant service offerings.
In the quarter, MTN SA maintained its leading network experience ranking and once again achieved
the highest ranking on the MyBroadband Network Quality Score in all main areas of the country.
Since launching MTN 5G in June, MTN SA continued to deliver 5G connectivity with more than 100
sites and across multiple spectrum bands. Our network resilience programme is mitigating the impacts
of load shedding and load reduction in order to guarantee the best customer experience, despite a
further increase in power outages in September.
This very strong network performance has also been assisted by the Independent Communications
Authority of South Africa (ICASA) issuing certain high demand frequency spectrum to MTN on a
temporary basis. Such frequencies were deployed in urban and rural areas to alleviate congestion and
provide further world-class quality and speeds to our customers during the COVID-19 lockdown
period. On 30 September, ICASA announced the broad terms of the planned spectrum auction and
the wholesale open access network (WOAN), as well as the decision to extend the temporary
allocation of spectrum.
Q3 saw MTN SA staff continuing with work from home arrangements, with most remaining at home.
This includes many of the in-house call centre agents who have been set-up at home so they can
continue serving our customers. Staff in our branded stores continued to adhere to the strict COVID-
19 social distancing and sanitation protocols and during the quarter, MTN SA concluded its mass
testing of customer-facing employees. Through the MTN Y’ello Hope programme, the MTN
Foundation provided 16 NGOs with support in the form of PPE and food parcels. MTN SA has now
zero-rated over 950 health, education and employment websites, including all public universities,
TVET colleges, as well as hundreds of schools and NPOs, as guided by the Department of
Communications and Digital Technology working group, including the Department of Basic Education.
MTN SA also collaborated on the national launch of the COVID SA Alert app which is also zero-rated.
MTN Nigeria delivered a solid performance in a challenging operating environment, with service
revenue growth of 13,8% and an acceleration in Q3 growth to 16,5% YoY. This performance was largely
driven by continued growth in data and a recovery in voice against a backdrop of ongoing oil price
volatility, COVID-19-related pressures and scarcity of foreign exchange.
Voice revenue grew by 4,0%, with a recovery in the trend to 7,0% YoY in Q3, on the back of expanded
customer acquisition touch points, rural telephony initiatives as well as revamped offers and CVM
toolkits to increase usage and traffic. MTN Nigeria added 3,9 million customers in Q3, bringing the
overall base to 75 million subscribers.
Data continued on a strong trajectory of growth with revenue up 57,1%. Continuing the momentum
from H1, Q3 growth was 56,0% YoY and was delivered through a combination of increased active data
users and usage, which drove higher traffic. The number of active data subscribers increased by
1,7 million, to close the quarter at 30,7 million. Some 2,9 million new smartphones connected to the
MTN Nigeria network, increasing smartphone penetration to 45,2% of the base – up from 43,5% in Q2
and 41,7% in Q3 2019.
Growth in the digital business remained strong off a low base, increasing by 116,1% and 103% YoY in
Q3. This was supported by increased adoption of digital products and services offered into the
1,5 million active user base.
Fintech revenue rose by 28,2%, and by 25,9% YoY in Q3. Increased adoption of airtime lending service
MTN Xtratime remains the key driver of growth in the business. The strategic and commercial
initiatives to scale the business are ahead of schedule with over 90 000 new MoMo agents added in
the quarter, which ended with 311 770 registered agents – this exceeded the year-end target of
300 000. MTN Nigeria increased its fintech subscribers by 1,2 million to reach 3,4 million in Q3, and
the volume of transactions processed increased by 101,0% in the period to 29,4 million.
Enterprise revenue grew by 2,0% but declined in Q3 by 2,1% YoY largely due to the economic impact
of the lockdown on the businesses we support. However, there was some improvement in the Q3
performance compared to Q2 as economic activity started to recover.
EBITDA rose by 7,9% and the EBITDA margin was 51,0%, from 53,7%. This was impacted by the
combined effects of a 2,5% increase in value-added tax (VAT), the change in the treatment of non-
recoverable VAT on lease payments, and COVID-19-related costs. The EBITDA margin was also affected
by the accelerated 4G site rollout, which commenced in Q4 2019, resulting in the full impact of
increased lease rentals coming through in 2020. This put upward pressure on lease rental costs in the
period, along with the effects of a 23,9% adjustment in the official exchange rate.
Southern and East Africa and Ghana (SEAGHA) region
The SEAGHA region delivered another solid performance, navigating the challenging trading
conditions brought about by COVID-19 and aided by the revival in some economic activity into Q3 as
lockdown restrictions were eased. SEAGHA recorded a strong increase in service revenue of 19,2%,
with all operating companies improving in Q3 to drive aggregate regional growth of 19,8% YoY. The
region increased subscribers by 3,8 million to 55,1 million.
MTN Ghana produced another good performance, with service revenue growing by 18,8%, driven by
double-digit improvements in voice (up 12,0%) and data (up 21,0%) revenue along with further solid
fintech revenue growth (up 24,8%). The growth in revenue was supported by strong increases in
overall subscribers as well as in active data and fintech users, while the ongoing deployment of CVM
helped to manage churn and improve adoption and usage of product and service offerings.
The EBITDA margin for MTN Ghana expanded by 3,2pp to 53,3%, supported by various cost efficiency
initiatives including enhanced penetration of electronic distribution channels and optimising network
MTN Uganda increased service revenue by 9,6%, with a recovery in most revenue lines. Notably, the
pleasing growth in voice (up 4,4%), data (up 30,1%) and fintech revenue (up 10,5%) was supported by
increases in the user base and usage. The EBITDA margin expanded by 1,4pp to 49,0%, supported by
higher revenue and cost efficiency initiatives.
Overall, the SEAGHA portfolio excluding MTN Ghana delivered healthy service revenue growth of
19,6%, and 22,0% YoY in Q3.
West and Central Africa (WECA) region
The WECA region grew service revenue by 7,8%, and by 9,3% YoY in Q3 – well-above the blended
average inflation of approximately 3,0% across the region. This was a pleasing outcome in light of
ongoing uncertainty in the political and economic environment in various markets within the WECA
portfolio. Q3 showed some signs of economic recovery, although there remains pressure from the
effects of COVID-19. The overall service revenue performance was enabled by continued subscriber
growth of 1,5 million QoQ to 38,6 million, and improvements in fintech and data revenue.
MTN Ivory Coast recorded an increase in service revenue of 8,3%, supported by net additions of
0,6 million in Q3 as well as ongoing strong revenue growth in data (up 25,1%) and fintech (up 14,2%).
The effective execution of marketing, sales and distribution initiatives implemented during the period
helped to drive gains in market share and an acceleration in voice revenue, which increased by 2,8%
(up 5,7% YoY in Q3). The EBITDA margin widened by 5,9pp to 34,2%.
MTN Cameroon’s service revenue grew by 4,7%, achieving further market and value share gains, in a
challenging environment as the conflict in the Northwest/Southwest regions continued. Data revenue
was up by 19,7% and fintech revenue increased by 40,8%. The EBITDA margin for MTN Cameroon
improved by 2,4pp to 33,0%.
Excluding MTN Cameroon and MTN Ivory Coast, the WECA markets grew their service revenue by an
aggregate of 9,2%, and 10,1% YoY in Q3.
Middle East and North Africa (MENA) region
The performance delivered by the MENA region was pleasing in a persistently difficult operating
environment, with double-digit service revenue growth of 22,7%, and of 24,7% in Q3. This was largely
supported by solid growth in data revenue (up 46,2%) with an 11,2% YoY increase in active data
subscribers in the nine months to September 2020. Total subscribers (excluding MTN Irancell)
increased by 0,2 million in the quarter to 25,5 million.
MTN Syria grew service revenue by 23,9%, driven by growth in voice (up 9,6%) and data (up 33,5%).
The EBITDA margin declined by 15,4pp to 23,2% as a result of a material devaluation in the local
currency, which put pressure on foreign-denominated operational expenditure.
MTN Sudan increased service revenue by 71,4%, underpinned by growth in voice (up 53,1%) and data
(up 122,8%) on the back of increased active data subscribers and usage. The EBITDA margin expanded
by 10,4pp to 39,9%, driven by strong growth in revenue.
MTN Irancell, our equity-accounted joint venture, again delivered strong underlying growth despite a
challenging operating environment including the depreciation of the currency and the high rate of
inflation. Service revenue grew by 34,4%, with data revenue up by 51,2%, benefiting from increased
usage (up 82,2%) particularly during the hard lockdown period. The EBITDA margin increased by 0,7pp
Portfolio optimisation and asset realisation programme (ARP)
Our ARP, initially launched in March 2019 and enhanced in March 2020, aims to reduce debt, simplify
our portfolio, reduce risk, improve returns and realise capital of at least an additional R25 billion over
three to five years. In August 2020, the group announced its decision to focus on its pan-African
strategy and exit the Middle East region in an orderly manner over the medium term.
Discussions regarding the potential sale of our 20% shareholding in Belgacom International Carrier
Services SA (BICS) are ongoing and we will update the market of any further developments in this
MTN Syria is included in those assets classified as held for sale and it remains the group’s intention to
exit its 75% stake in the business.
The group has now fully exited its 18,9% investment in Jumia Technologies AG (Jumia), realising a total
consideration of approximately R2,3 billion (US$138 million). We are proud to have been a partner in
the evolution of one of Africa’s pioneering online marketplace businesses and will continue our
relationship with Jumia through ongoing operational partnerships in some markets.
We are pleased to announce that a sale and purchase agreement has been concluded to transfer an
8% holding in MTN Zambia to the National Pension Scheme Authority (NAPSA) in Zambia. This forms
part of the localisation strategy within our broader portfolio optimisation and ARP. The group has
received net proceeds of approximately R204 million for the transaction.
In September 2018, MTN Ghana completed an initial public offer in which 12.5% of its shares were
listed on the Ghana Stock Exchange (GSE) and nearly 130,000 Ghanaians were welcomed as
shareholders in the company. MTN Group intends to sell down a further 12.5% of its investment in
MTN Ghana, with a focus on local shareholding, which will increase MTN Ghana’s free-float on the
GSE to 25%.
Update on regulatory and legal considerations
MTN Afghanistan anti-terrorism complaint
On 27 December 2019, a complaint for violation of the Anti-Terrorism Act was filed in the United
States District Court for the District of Columbia (the Complaint). The Complaint was filed on behalf of
American service members and civilians who were killed or wounded in Afghanistan between 2009
and 2017, and on behalf of their families. The Complaint alleges that several Western businesses
supported the Taliban by, inter alia, making payments to ensure the protection of their infrastructure.
The defendants named in the Complaint are made up of a number of different groups of affiliated
companies, one of which is MTN and certain of its subsidiary companies, including MTN Afghanistan.
In late April 2020, MTN filed a ‘motion to dismiss’ that asked the court to end the lawsuit and grant a
judgment in MTN’s favour for two independent reasons: because the court lacks jurisdiction over
MTN, which does not operate in the United States, and because the complaint does not allege any
conduct by MTN that would have violated the Anti-Terrorism Act.
In June 2020, the plaintiffs in the matter filed an amended Complaint to which further complainants,
defendants and allegations were added. MTN believes that the amended Complaint suffers from the
same fundamental defects in the case explained in the April motion. The plaintiffs proceeded to
amend their initial Complaint, following the June 2020 motion to dismiss. With the Complaint having
been amended with new allegations, MTN filed another motion to dismiss in September 2020. This
motion to dismiss takes into account the new allegations made in the amended Complaint. MTN
remains of the view that the court should dismiss this claim on the grounds of lack of jurisdiction and
that the amended Complaint still does not allege any conduct by MTN that is in violation of the Anti-
MTN conducts its business in a responsible and compliant manner in all its territories and will defend
its position where necessary.
MTN Ghana classification as a significant market power
In June 2020, the National Communications Authority (NCA) classified MTN Ghana as a significant
market power (SMP) and determined that special regulatory restrictions would be enforced on MTN
Following consultations as well as engagements on the matter with regulatory and other stakeholders,
MTN Ghana applied to the courts – on procedural grounds – for relief in the form of a judicial review
of the NCA’s decision. Given the progress made in further engagements with the NCA and Ghana’s
Ministry of Communications, MTN Ghana, on 13 October 2020, withdrew its legal challenge filed at
the Supreme Court in order to pave the way for further discussions and an amicable resolution. These
discussions are ongoing.
MTN Ghana is a responsible market player in a highly competitive market and does not engage in anti-
Spectrum allocation and auction in South Africa
On 2 October 2020, ICASA released the full terms of the spectrum auction and WOAN. The auction
will include spectrum in the 700-800 MHz band, 2,6 GHz band and 3,5 GHz band. The 2,3 GHz will be
auctioned at a later stage to be determined. The temporary spectrum allocated at the start of
lockdown, and which was due to expire in November 2020, has been extended to March 2021. This
continues to significantly ease the congestion in hotspots across the country where data traffic has
surged. MTN welcomes the planned spectrum auction, which will be critical in further broadening
access in South Africa in a sustainable manner.
COVID-19 pandemic impact on the business
Although the trading environment remains quite challenging, the easing of lockdown regulations and
restrictions that have arisen from the COVID-19 pandemic has led to some improvement in economic
activity and market conditions. We remain focused on the key areas impacting our business, namely:
social (our people, communities and stakeholders); commercial (including our customers); network
and supply chain; and funding and liquidity.
We continue to implement strict health measures and monitoring to ensure the safety of our people,
who remain empowered to work remotely although some have started returning to workplaces. The
group provides ongoing support through the MTN Global Staff Emergency Fund, Y’ello Hope Packages
for our stakeholders as well as MTN foundations and various government-led initiatives in our
markets, including the Solidarity Fund in South Africa.
In September, MTN added its voice to global efforts to encourage the wearing of masks to fight the
spread of COVID-19, committing our marketing resources in the month to our #WearItForMe
campaign across our markets.
Our commercial trends have been encouraging as COVID-19 restrictions have eased across the MTN
footprint. Overall data traffic has remained resilient at elevated levels, although we have observed
some easing from the peaks. Voice traffic and revenue, which initially came under significant pressure,
have been in recovery and the month-to-month trajectory of fintech drivers has trended upwards
following a dip in April 2020.
Comparing the September 2020 level for the group’s data traffic against April 2020, the level of activity
was 10,2% higher, and up 8,9% QoQ in Q3. For our largest markets on the same basis: MTN SA was up
by 2,0% (and 4,1% QoQ), MTN Nigeria increased by 22,1% (and 15,2% QoQ), while MTN Ghana was
up by 9,3% (and 5,6% QoQ). These trends demonstrate the resilience of data traffic relative to the
elevated activity prompted by COVID-19 during Q2.
On the whole, data demand benefited from shifts in consumer spending patterns during the peak
periods of lockdowns and restrictions as spend that would have otherwise been directed elsewhere
(such as travel, entertainment etc) was channelled into data and other digital services. As restrictions
have been lifted, we have observed some reversal in this trend.
Since April 2020, during which the effects of COVID-19 were the most severe, the trajectory for voice
has been encouraging. Group voice traffic was up by 11,5% at the end of September 2020 compared
to the April 2020 level. For MTN SA, voice traffic was 7,0% higher in September versus April, MTN
Nigeria was up by 14,1% and MTN Ghana had increased by 5,6%. These trends are evidence of the
recovery in voice traffic since the most severe impacts of COVID-19.
The commercial trends in fintech have also recovered strongly from the April 2020 low, with group
fintech transaction volumes in September 2020 up by 38,7% on the April 2020 level and up 23,1%
QoQ. On the same basis, the value of fintech transactions in US dollar terms was up by 64,7% and
As we continue our focus on managing the risks posed by the pandemic, we are also focused on
continued commercial execution around the opportunities it presents. In particular, we are well
positioned for the accelerated need for digitalisation, which is already evident in the trajectory of our
data, fintech and digital businesses.
Network and supply chain
Throughout the pandemic we have maintained the capacity and resilience of our networks. As
lockdown regulations have lifted in our markets, we have been able to resume a more regular rollout
of network investment as restrictions on movement and logistical bottlenecks have eased. This has
also enabled us to increase the headroom in our networks, notably in South Africa and Nigeria among
our larger markets.
To ensure there are no significant interruptions to our business, we continue to closely monitor and
manage the impact of the pandemic on our network and supply chain. At the end of September 2020,
the headroom on our data networks was 45,0% in South Africa, 58,0% in Nigeria and 30,0% in Ghana.
Funding and liquidity
The strength and resilience of our balance sheet has been evidenced in our ability to weather the
volatility brought about by COVID-19. Year to date we have successfully fast-tracked and closed
R18,2 billion in funding to mitigate refinance risk around upcoming maturities. We continued to
manage and focus on liquidity as a priority. At 30 September 2020, our group net debt was
R60,6 billion, and our net debt to EBITDA ratio was 0,9x, well within our covenant of 2,5x. Our interest
cover was 9,0x, comparing favourably with the covenant limit of no less than 5,0x.
At the holdco level we maintained a healthy liquidity position, with holdco net debt of R55,5 billion
slightly higher than the December 2019 level. At the end of September 2020, our holdco leverage was
2,6x, affected mainly by timing effects of cash upstreaming from our opcos, although slightly improved
on the June 2020 level of 2,7x.
MTN Nigeria has declared and paid its final dividend for 2019 as well as its interim 2020 dividend
(totalling R5,4 billion as at September 2020). The upstreaming of this cash to the group remained
delayed in Q3 due to challenges in securing foreign currency in that market, however we expect the
availability of US dollars to improve in the last quarter of the year and some upstreaming of dividends
Our approach to liquidity management continues to be prudent and focused on cash preservation. At
30 September 2020, our holdco liquidity headroom stood at approximately R39,0 billion – comprising
R13,4 billion in cash and R25,6 billion in committed, undrawn credit facilities.
Our medium-term focus remains to reduce our exposure to US dollar debt and improve the funding
mix at the holdco level through improved cash flows which will be supported by proceeds from our
On 26 October 2020, we announced two important new appointments: that of CEO of major subsidiary
MTN Nigeria and that of MTN Group Chief Risk Officer (GCRO), a new group executive committee
(exco) position. Both are effective from 1 March 2021.
Karl Toriola, current vice president for MTN Group’s WECA region, will take over as MTN Nigeria CEO
from Ferdi Moolman, who has served MTN Nigeria with distinction for the past five years. Ferdi will
return to South Africa, where he will assume the new role of GCRO and lead the evolution of our
enterprise-wide risk management system. Both will remain members of the group’s exco.
Karl’s successor as Vice President for WECA will be announced after the group strategy review is
completed by the end of November 2020.
Despite the relaxation of Covid-19 lockdown restrictions across our markets, the operating
environment remains challenging and uncertain. We will continue to focus our efforts and capital
investments on ensuring we provide our customers with reliable connectivity and digital services
during these challenging times.
While we continue to manage the risks brought about by COVID-19, we are also well-positioned to
unlock the opportunities that have arisen. The pandemic and its effects have highlighted the
importance of connectivity, financial inclusion and digital services, and we are reviewing and refining
our strategy to position the business to capture growth going forward.
As we continue to strengthen our operational and financial position – focusing on expense
management and efficiencies, as well as liquidity and cash preservation – we are well placed to sustain
growth and meet our targets over the medium term. Our capital expenditure (capex) programme
prioritises the resilience and capacity of our networks, while we execute our strategy to deliver
sustainable growth across our operations.
We target capex of at least R26,0 billion for 2020, revised up from the previous guidance of
R24,0 billion as the overall visibility and ability to roll out the network investment in our footprint has
improved following the relaxation of COVID-19 related regulations and restrictions.
Certain information presented in this quarterly update constitutes pro forma financial information. The responsibility for preparing and
presenting the pro forma financial information and for the completeness and accuracy of the pro forma financial information is that of the
directors of MTN. 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. It has not been audited or reviewed or otherwise
reported on by our external joint auditors.
The financial information on which this quarterly update is based, including constant currency information, has not been reviewed and
reported on by MTN’s external auditors. Constant currency information has been presented to remove the impact of movement in currency
rates on the group's results and has been calculated by translating the prior financial reporting period’s results at the current period’s average
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 prior year constant currency results compared to the current
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 full financial results are available on the MTN’s website at:
30 October 2020
Tamela Holdings Proprietary Limited
JP Morgan Equities South Africa Proprietary Limited
Date: 30-10-2020 07:05:00
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