MTN increased its subscribers during the financial year ended 31 December 2014 by 7,5% to 223,4-million. During the same period, its revenue increased 6,4% to R146 154-million.
This was driven in part by data revenue, which increased 33,2% to R27 317-million. Voice traffic and data traffic increased 6,5% and 85,8% respectively
The group increased EBITDA by 10,2% to R65 520-million, with the EBITDA margin increasing 1,5 percentage points to 44,8%.
Headline earnings per share (HEPS) increased 8,9% to 1 536 cents, and the company declared a final dividend of 800 cents per share, with total dividend of 1 245 cents per share.
The group continued to benefit from encouraging growth in non-voice revenue, driven by various data initiatives (including the Mobile Money offering) across key markets. It also made good progress in transforming our operating model, particularly in reducing costs and monetising assets with the finalisation of the agreement to sell and lease back towers in Nigeria in the fourth quarter of 2014.
The South African performance was in line with expectations and provided evidence in the second half of a successful turnaround with consistent month-on-month improvements in the last six months of the year.
MTN Nigeria’s performance was below expectations, impacted largely by regulatory determinations and economic pressures as well as operational challenges.
Group revenue’s 6,4% increase during the year was largely the result of an increase of 12,1% in MTN Nigeria’s revenue and a decline of 3,9% in MTN South Africa’s revenue. Data revenue increased by 33,2% in the year, to contribute 18,7% to total revenue at year end.
In 2015, MTN expects to benefit from a number of interventions put in place in South Africa and Nigeria in the previous year. In South Africa, it expects to build on the positive momentum gained on revenue and subscriber additions in the second half of 2014. The South African operation will also accelerate its immediate capex plans to support our medium-term growth prospects, particularly in the data area.
MTN Nigeria will focus on active subscriber management, providing more competitive offerings and improving data usage. The company continues to engage positively with the regulator. However, in Nigeria some level of uncertainty remains with regards to the implications of the oil price and currency fluctuations, which may lead to slower economic growth. This may result in some headwinds for the business in 2015.
To drive long-term sustainable growth across the group, MTN will increase data revenue by encouraging uptake through increased smartphone penetration, competitive pricing, bundled services and increased speeds.
The continued rollout of MTN Mobile Money and broader financial services remains a priority, with the widening of our distribution platform and the introduction of new products and services including micro lending, international remittances, retail payments and insurance. The company will continue to develop our digital offering through focusing on local content and working with other suppliers.
In addition, in 2015, MTN will focus on becoming the ICT partner of choice to companies expanding into Africa; to governments seeking to improve engagement with their citizens; and to companies aiming to enhance their business offering.
It will also transform its operating model through cost optimisation and increasing operational efficiencies remains another key strategic theme. Project Next!, the company’s back-office transformation programme, is starting to gain traction with the substantial migration of the back office functions in Ghana to the Shared Services Hub (SSH) during the year. The programme is planned to be rolled out in another two markets in 2015.
MTN will also continue to streamline costs in the distribution network in some key markets. The commercialisation of MTN’s tower infrastructure is a major part of its efforts to optimise the network.
Data services remain the key driver of the group’s revenue growth and increased their contribution by 3,8 percentage points to 18,7% of total revenue in 2014.
In the year, the number of data users increased by 22,8% to 101,2-million as MTN expanded its 3G and LTE networks and stimulated the adoption and usage of data-enabled devices and smartphones. At the end of December, the group had 51,9-million 3G-enabled devices on its network, an increase of 30,4% on the previous year.
MTN sees a significant opportunity to tap into the digital space on the African continent and in the Middle East. Through its investments with Rocket Internet in Africa Internet Holdings (AIH) (33%) and Middle East Internet Holdings (MEIH) (50%) it is aiming to leverage its brand, customer base, distribution network and payment solutions (Mobile Money) in the markets where both AIH and MTN are present to deliver a range of internet services including ecommerce retailing, as well as market place, taxi, travel, classified and food delivery services.
During 2014 AIH launched 44 new operations across 23 markets in Africa while MEIH has 11 operations in various countries in the Middle East providing a strong base for future growth. Furthermore MTN has launched, as part of its entertainment strategy, a host of new products and services, including MTN FrontRow, a video-on-demand offering, which was launched in December.
The MTN Group believes its enterprise business unit (EBU) is well placed to becoming the ICT partner of choice to corporate and SME, public sector and financial services customers, given our extensive infrastructure with 22 established operations and 47 data centres across Africa and the Middle East.
During the year the EBU was centralised under the newly appointed executive, Mteto Nyati. In addition, the acquisition of the 50% plus one share in Afrihost was concluded in November 2014.
