The MTN Group is pleased to report a 94 percent increase in profit to $662 million driven by strong performances across all its operations during the 2004 financial year. These excellent results reaffirm its position as one of Africa’s most successful mobile operators. Now, laying the groundwork to expand its operations beyond the continent, MTN has confirmed that it is bidding for the second mobile license in Saudi Arabia.
“Saudi Arabia is a highly strategic market in the Middle East, as well as being home to some of the world’s most enthusiastic users of mobile phones and mobile technology,” said Phuthuma Nhleko, CEO, MTN Group. “MTN has a proven approach to the new markets we enter, focusing on the development of local expertise and building opportunities for local entrepreneurs to create new businesses and technologies. MTN looks forward to bringing its high standard of operations and innovative services to Saudi Arabia.”
MTN is Africa’s leading mobile operator (by revenue and profit) and is celebrating its 10th anniversary this year. MTN’s bid team is working hard to develop a business plan that can bring the latest world-class mobile technology to mobile users in the Kingdom, along with its empowerment and small business development model to help support long term economic prosperity.
In its latest results, the group recorded a 77 percent increase in adjusted headline earnings per share to $.39. Earnings before interest, tax, depreciation and amortization (EBITDA) increased by 44 percent to $1,382 million, resulting in profit after tax (PAT) of $663 million, 94 percent up on the previous financial year. The overall EBITDA margin for the group increased to 37.6 percent from 32 percent last year. The group’s headline earnings per share have been adjusted to exclude the financial impact of the deferred tax asset recognized by MTN Nigeria.
“As we mark our 10th year of operation, we are particularly pleased to report that we are nearing the 10 million subscriber mark, having recorded 9,543,000 subscribers by March 2004, of which almost two million are in Nigeria,” said Nhleko.
The South African market remains buoyant with MTN SA achieving its highest subscriber growth ever during the period under review. Net new connections of 1,547,000 subscribers for the year were achieved. MTN SA’s total capable subscriber base as of March 31, 2004 was 6,270,000. This is a year-on-year increase in the subscriber base of 33 percent in total. MTN’s overall South African market share remains steady at around 38 percent.
The group derives a growing portion of its earnings from its non-South African operations, accounting for 36 percent of its revenue, 50 percent of its EBITDA and 46 percent of its adjusted headline earnings during the year. Saudi Arabia and South Africa have been developing ever stronger political, social and economic links over the last decade. Earlier this month a Saudi trade delegation visited South Africa, culminating in an agreement to create a Saudi-South African Joint Economic Commission.
“There is enormous opportunity for South African and Saudi Arabian business to work together,” said Nhleko. “We have strong similarities in geography and demographics, as well as very strong historical ties due to the significant Muslim community in our country. Mobile technology links countries and continents, driving entrepreneurship through ingenuity and creativity. MTN is committed to creating economic empowerment and social uplift as part of its business ethos.”