COVID-19 Pandemic Did Not Impact On First Quarter PerformanceꟷMTN Group President & CEO

The impact of the Corona Virus Disease, 2019 (COVID-19) was not significant on the performance of the Mobile Telecommunications Network (MTN) Group during the first quarter of the year ended 31 March 2020.

According to Robb Shutter, MTN Group President and Chief Executive Officer (CEO), the first quarter financial results for the year ended March 31, 2020 recorded a positive service revenue trajectory.

Mr Shutter said MTN continued to build commercial momentum, adding 6.6 million subscribers in the quarter, with active data users increasing by .9 million and Mobile Money (MoMo) subscribers by 0.4 million.

He said MTN also continued to scale its Ayoba platform, recording 2.6 million monthly active users and accelerated its MoMo agency network in Nigeria, under the Group’s super-agent licence, adding 70 000 agents in the first quarter, bringing the total number of registered agents to 178 000.

On strategic progress, he said the digital business returned to growth, booking 15.6% in the quarter, while in MTN South Africa (SA), the enterprise business recorded its second quarter of growth.

Mr Shutter disclosed that in May 2020, the MTN Group commenced phase two (2) of the national roaming agreement with Cell C and looked forward to a continued partnership.

For the first quarter, he said, MTN delivered a solid performance, increasing constant currency service revenue by 11.1% and EBITDA by 15.6% with EBITDA margin improving by 2.1pp to 43.2%, in line with medium-term targets.

He disclosed that the group recorded voice, data and fintech revenue growth of 6.3%, 26.4% and 26.0%, respectively, with digital revenue returning to growth, increasing by 15,6%, adding that the Group continued to execute on its strategic objectives and progress towards becoming a digital operator.

Mr Shutter noted that the COVID-19 situation was an evolving one and would undoubtedly impact the year ahead.

He said given the uncertainties associated with the duration and economic impact of the pandemic, it was difficult to reliably quantify the direct and indirect financial impacts on the business at this early stage and gave the assurance that the group would continue to focus on business continuity and efficiency, and that strict measures had been implemented to preserve resources and strengthen its resilience.

The Group President and CEO said the Group remained focussed on delivering its key prioritiesꟷ looking after our people, our customers and our networksꟷ while focusing on efficiencies in these difficult times of COVID-19.

“For our people, the immediate priority is their health and safety, where the work-from-home programmes across our markets empower our staff to work remotely while ensuring continuity in our operations. For our customers, we have ramped up our digital channels as a service alternative, to enable them to continue purchasing airtime and accessing our products and services seamlessly as well as launching Y’ello Hope Packages in most of our markets,” Mr Shutter said, adding that various initiatives of the Group supported governments across its markets with communication systems and connectivity as the Group played its part to help minimise the economic and social impact.

On his part, MTN Group Chief Financial Officer (CFO), Ralph Mupita, expressed satisfaction with the service revenue growth of 11.1% which, he said, was achieved on a constant currency basis, translating to 16.5% on a reported basis.

Mr Mupita noted that good cost control across the group supported the increase in group EBITDA margins, with a particular strong performance from MTN Ghana, adding that notwithstanding the impact of COVID-19 in the first quarter, the balance sheet remained resilient, with cash and committed undrawn facilities approximately R45 billion at the holding company level, providing sufficient liquidity during these uncertain and unprecedented times.

Looking ahead, he said the current environment was marked by significant uncertainties and that it was still too early to assess the economic impact of the pandemic on customers and reliably quantify the direct or indirect financial effects on the company’s business , adding that the remainder of the year would be shaped by the ramifications of the pandemic and that all stakeholders would to be regularly updated on the effects as they became clearer.

Mr Mupita said MNT would not focus only on managing the risks brought about by COVID-19, but also on the opportunities it was creating in the accelerated digitalization it has brought about.

He said the Group was well-positioned as a company to benefit from the evolution, especially given its focus on growth in data, digital and financial services businesses and remained focused on the execution of its BRIGHT strategy to deliver sustainable growth in its operations and value to all stakeholders.