Most challenging year ever delivers marginal revenue increase
MTN Group has reported a marginal 0.4% revenue increase during what it describes as ‘the most challenging year in the company’s 22-year history’.
MTN’s financial results for the year ended 31 December 2016 show that group subscribers increased by 3,3% to 240,4 million and revenue increased marginally by 0,4% to R146 894 million. Data revenue increased by 16,7% to R39 546 million, voice traffic decreased by 1,7% and data traffic increased by 143% and a final dividend of 450 cents per share was recorded.
MTN Group noted the challenges in 2016 had been ‘precipitated by a number of material regulatory, macro-economic and political challenges experienced across our regions’. However, despite these difficulties, the business began to show encouraging first signs of a turnaround, it said.
Following the conclusion of the settlement agreement relating to the Nigerian regulatory fine in June 2016, the infusion of new senior management and the appointment of a new Group Chief Executive Officer (CEO) commencing on 13 March 2017, the MTN board of directors (Board) undertook a deep and fundamental strategic review of the business and its processes to ensure MTN is operating far more optimally in a complex and difficult operating environment. The outcome of this review illuminated areas of the business which required urgent attention and as a result, the company embarked on a transformation initiative, IGNITE, designed to optimise its operations and position the Group most favourably to participate in a rapidly evolving sector.
Much of 2016 was consumed with putting in place corrective measures to ensure the delivery of the company strategy. Towards the end of 2016, its largest operations and some of the tier two operations began to show signs of a turnaround following an extended period of underperformance.
MTN noted that in 2016, the Group continued to operate in a challenging environment. Global economic growth slowed, particularly in sub-Saharan Africa where many countries rely on commodity exports. ‘Weak economic conditions across our footprint resulted in volatile currencies, precipitating higher foreign-denominated expenses as well as forex losses for the Group in the reporting period. The contraction of the Nigerian economy impacted consumer spending in that country, and had a knock-on effect on the rest of West Africa, notably Cameroon and Benin.’