MTN Group today reported a very strong set of operational and financial results for 2020, demonstrating business resilience under COVID-19 pressures and a challenging macroeconomic environment. Africa’s leading mobile operator also announced its re-positioned strategy – Ambition 2025 – to accelerate growth and reveal the value of its infrastructure assets and platforms.
The Group added 29 million subscribers in the year, to reach a total of 280 million across 21 markets. It reported a 52% increase in adjusted headline earnings per share, a four-percentage point increase in return on equity to 17% and more than doubled the operating cash flow to R28,3 billion.
“We continued to perform favorably against our medium-term targets,” said President and Chief Executive Officer Ralph Mupita. “In constant currency terms, service revenue grew 11,9% to R170 billion and EBITDA increased by 13,4%, maintaining our strong operating leverage. The Group’s EBITDA margin improved by 0,9pp to 42,7%, benefiting from the execution of our expense efficiency programme.”
In Uganda, MTN posted very strong and resilient performance in Q4 of 2020 despite the COVID-19 disruptions. The subscriber base increased by 12.3% to 14.2 million subscribers, up from 12.6 million the previous year.
Active data users were up by 34.8% to 4.6 million, which drove an increase in traffic also brought about by higher levels of online demand resulting from the effects of COVID-19. This was supported by learn-from-home and work-from-home offerings provided for our customers.
In pursuit of our financial inclusion objectives and growth strategy, Mobile Money (MoMo) users grew by 14.4% YOY to 8.5 million, spurred by the move towards cashless financial transactions to avert the spread of the COVID-19 pandemic. While COVID-19 accelerated the adoption of mobile financial services, growth in fintech revenue was moderated by reductions in transaction fees to support our customers, lockdown restrictions on agents and a slowdown in economic activity. However, we believe that this builds a solid base for future growth in our fintech business.
Absolute EBITDA in constant currency terms increased by 14.9% YoY in 2020, with a 2,4pp increase in EBITDA margin to 49.5%. This was driven by a well-executed sustainable cost efficiency program.
At the onset of the COVID-19 pandemic in the country, MTN Uganda undertook a number of initiatives aimed at easing the negative impact of the pandemic on its customers and the economy as a whole. MTN Uganda lowered MoMo transaction rates to enhance individual disposable income for its customers and launched subsidized data bundles to ease the transition to working from home. MTN also zero-rated university and school websites to facilitate home learning. In total MTN Uganda spent in excess of UGX2 billion on various COVID 19 interventions.
“MTN Uganda is committed to enhancing the wellbeing of our customers especially in the midst of global challenges. We will continue to invest in better connectivity, a seamless customer experience and better pricing structure to enable us to continue delivering a bold, new digital world for our customers, Wim Vanhelleputte, MTN Uganda Chief Executive Officer said.
Vanhelleputte further explained that with the planned listing of MTN Uganda on the Uganda Securities Exchange, the telecom company looks forward to enabling Ugandan’s to own a part of the success story of MTN, and that this will further accelerate performance going forward.
MTN Uganda will continue to invest heavily over the next five years in infrastructure development and advanced technologies which will give the customer a better experience and help the company further enhance its leadership position in this market.
Prioritizing the lives of customers
The MTN Group continued to prioritize the health and safety of its people and mourned the loss of 10 MTN employees to COVID-19, after reporting a total of 1,404 infections in the period to the end of February 2021.
“We are pleased to have made a US$25 million donation in support of the African Union’s programme to secure much-needed COVID-19 vaccines,” said the Group President. “This partnership deepens MTN’s role in the ongoing work to save lives in the markets in which we operate. Importantly, it aligns with our ambition to create shared value and ensure the continent’s future progress and prosperity.”
Whilst managing the challenges presented by COVID-19, MTN Group remains cognizant of the opportunities presented by the pandemic, particularly the accelerated need for digitalization evidenced in the greater adoption and usage of MTN services. During the year, 19 million data users and almost 12 million MoMo users joined the MTN family, to reach totals of over 114 million and 46 million respectively. The Group’s networks remained well invested, with capex of R28,6 billion in 2020 and headroom to accommodate growth of more than 110% in data traffic in the year.
MTN Group also announced a revised strategy. “Further to our previous announcement regarding our intention to focus on our pan-Africa strategy, we completed a comprehensive strategy review in Q4 2020 and are excited to introduce ‘Ambition 2025’,” Ralph said. “As part of this strategic repositioning, we are looking to structurally separate our infrastructure assets and platforms, such as fintech, to reveal value and attract third-party capital and partnerships into these businesses, over the medium-term.”
“Going forward, we believe that Ambition 2025 will position the business to capture the exciting opportunities across our markets and our medium-term guidance has been enhanced to reflect this accelerating growth outlook. To support this, we plan to invest approximately R29.1 billion in our network, fintech and digital services platforms in 2021.”