MTN Group’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, 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.

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. It also highlighted the company’s unique position in a fast moving industry. 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, our two largest operations and some of the tier two operations began to show signs of a turnaround following an extended period of underperformance.

As previously reported, MTN South Africa delivered a sub-optimal result in the first six months of 2016, with network, systems and customer service challenges. While all these issues were not fully resolved during the second half of 2016, MTN South Africa showed strong improvements in network quality and capacity.

The operation significantly increased its net promoter score (NPS) particularly in the fourth quarter where it increased its NPS by 8 percentage points (pp) to 81% when compared to
the same period in 2015.

MTN South Africa’s earnings before interest, tax, depreciation, amortisation, impairment of goodwill, net monetary gains and share of results of joint ventures and associates after tax (EBITDA) in the second half of the year increased by 31,0% (excluding the MTN Zakhele Futhi share-based payment expense) compared to the first six months of the year.

Despite the impact of regulatory challenges and a disadvantaged competitive position in Nigeria, the result of subscriber disconnections and the withdrawal of regulatory services in the first half of the year, Nigeria continued to improve its competitive position throughout the year.

While revenue declined 6,3% in the first quarter of 2016 when compared to the same quarter in 2015, revenue growth improved steadily throughout the year and fourth quarter revenue increased by 4,0%* year-on-year (YoY). This was attributable to improved network quality and attractive value propositions.

This trend continued in early 2017, with revenue in January 2017 up by approximately 16%* YoY as the business continued to regain lost market share. We expect YoY growth to be maintained for the month of February 2017***. NPS more than doubled in the fourth quarter of 2016 when compared to the same period in 2015. However, the depreciation of the naira against the US dollar negatively impacted EBITDA margin and drove US dollar-linked costs higher.

MTN Irancell and MTN Ghana reported a strong performance driven by data revenue growth. MTN Irancell benefited from the country’s youthful demographics and higher smartphone penetration while MTN Ghana’s data revenue growth was attributable to low-cost smartphones sold following the successful launch of its 4G network. Group data revenue increased 19.7%* YoY contributing 27% of total Group revenue.

This was supported by the Group’s strategic decision to accelerate network investment across our markets, particularly South Africa, Nigeria and Iran. This investment will be critical in supporting the anticipated growth in data revenue.

MTN Group Annual Report  2016- Infographic

mtn group annual report 2016, mtn financial statement

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