…Signs investment pact with Mastercard
South Africa’s telecommunications company (MTNJ) on Monday reported 7.1% surge in its half-year earnings and hinted that it sealed an initial pact with Mastercard, a leading global payments firm, to sell a minority stake in its fin-tech arm.
The report reflected that the telecom operator’s headline earnings per share rose to 542 cents in the six months ended June 30 from 506 cents in the corresponding H1 2022.
Speaking on the company’s performance during the period under review which the management described as a difficult operating environment marked by elevated inflation, weaker local currencies and regulatory developments across the company’s 19 markets , MTN Group President and CEO, Ralph Mupita, said the achievements were linked to improved network availability driven by continued investments.
According to him, by end-June, MTN South Africa’s network availability was more than 90%, despite severe electricity shortages across the country.
He said: “We delivered a resilient performance in H1 23 and made good strategic progress against a tough macro backdrop.
“In South Africa, we were very encouraged by the improved network availability on the back of our power-resilience investment, resulting in a stronger Q2 23 performance than Q1 23”, Mupita added.
On the company’s performance in Nigeria, one of its largest markets, the CEO also reported that the telco also posted impressive performance and maintained that current reforms by the Federal Government were desirable for improved investment climate in the country.
He expatiated: “In Nigeria, we delivered a very strong operational result, having navigated the cash shortages in Q1 23 and increased inflation.
“The policy changes implemented in Nigeria in Q2 23 have short-term negative impacts, but we see these as being very constructive for the investment climate in the medium to longer term”, the industry expert projected.
A further analysis of the financial results indicated that MTN Group’s service revenue grew 15% to almost R108 billion in constant-currency terms while revenue from voice services increased 6% in the period.
The company further reported: “At the end of June 2023, we had 292 million subscribers with whom we worked to create shared value. This subscriber base – 4% higher than the same period last year – benefited from lower data rates and improved access to broadband services.
To facilitate the digital economy, we increased the number of active data users by more than 7% to nearly 140 million; reported a 19% increase in overall data traffic; and improved data affordability by reducing the average effective rate per megabyte by more than 22%”, the firm added
According to the report, the country’s second-biggest telecom company also reported that it had signed a Memorandum of Understanding (MoU) with Mastercard for a minority investment in its fin-tech arm, valuing it at around 5.2 billion dollars, almost 40% of MTN’s total market value.
Looking ahead, Mupita said the company would keep working to create shared value across our markets.
He assured: “We are focused on the continued execution of our Ambition 2025, which remains relevant in the current macroeconomic volatility and presents attractive scope for growth.
“As we manage the challenges in our operating environment, as well as the near-term impacts on our top-line and margins, we maintain our medium-term guidance”, the industry leader added.
