It’s “Business as usual” for MTN Group which announced it’s full-year results for 2010 on Wednesday. The group’s results reflect the explosion of mobile penetration in Africa, with the subscriber base growing by 20% to 141,6 million in December 2010.
Adjusted headline earnings per share were up 20.5% to 909,1c.
During the reporting period, MTN concluded MTN Zakhele, a black economic empowerment deal worth R8.1-billion, the largest ever in the industry. Zakhele now holds 4% of the MTN Group.
A final cash dividend of 349c per share was declared, and the dividend payout ratio increased to 55%, MTN said.
Revenue made modest gains, up to R114,7 billion in December 2010 from R111.9 billion in 2009.
Reported capital expenditure was R19.5-billion, 38% lower than in 2009 and slightly below what was estimated. The strength of the Rand, and lower expenditure in key African markets (particularly Nigeria and Iran) are responsible for the decrease in Capex. “The stronger rand reduced reported capex for the year by R2.3-billion,” the group said.
The positive results announced yesterday will underpin MTN’s strategy in the following year. “In the short to medium term I do not see any strategic shifts. The biggest area is looking at the services side of the business.” said Sifiso Dabengwa, incoming CEO of MTN.
The outgoing CEO, Phuthuma Nhleko, anticipates further growth in Africa, in an interview with Moneyweb he said that MTN has only achieved an average of 50% subscription penetration on the African continent. “Affordability is an issue,” he said. “If we had to bring down cost of handsets and obviously reduce our costs as well and so on, it means that you can actually get more people onto the network who can afford to be on the network. So I’m very positive that there is still some very significant organic growth in these countries.”
Nhleko also sees significant opportunity in mobile data services, “If you look at Nigeria, for instance, still 5% of total group revenue is data. If you look at Iran, it’s even less” he said. However, to take advantage of this opportunity, MTN will have to roll out significant investment in infrastructure in the region. To make significant gains in the region, MTN will have to outperform foreign firms, such as India’s Bharti, which has made clear it’s intention to aggressively pursue the low-end, rural-customer segment of the market.
By Angela Meadon
