MTN South Africa appears to be weathering the impact of Eskom’s load shedding, reporting a solid improvement in interim service revenue. But the spend has knocked it earnings. The company, which is owned by JSE-listed MTN Group, said service revenue in the six months ended 30 June 2023 rose by 1.9%, despite a slump in outgoing voice revenue.
“MTN South Africa’s performance remained resilient despite the challenging macroeconomic conditions in South Africa during the first half of the year,” the group said in a statement on Monday. The period was characterised by high levels of load shedding and constrained consumer spending due to rising inflation and hikes in interest rates by the South African Reserve Bank hiking to 14-year highs. The country experienced substantially higher year-on-year levels of power outages in the first half, totalling 181 days compared to 68 days in the first half of 2022,” it added.
“Pleasingly, we managed to drive improving momentum in service revenue growth of 2.5% in the second quarter, compared to the 1.3% growth reported in the first quarter. This was supported by the significant strides MTN South Africa made in fortifying its network. Our efforts towards implementing network resilience on our sites in South Africa led to a consistent month-on-month improvement in national network availability, which surpassed the 90% mark in June. On sites where the resilience investment has been completed, we have seen availability at target levels, even at stage-6 levels of load shedding.”
Telecommunications operators in South Africa, including MTN and its principal rival, Vodacom, have been forced to spend billions of rand on solar power, generators and lithium batteries to keep their sites running during Eskom power cuts.
The investment helped MTN report a 3.9% increase in the number of subscribers to 36.7 million by end-June. This was bolstered by a 6.4% increase in post-paid subscribers to 3.9 million (excluding telemetry users). Prepaid customers increased by 2% to 28.1 million.
However, the investment in network resilience wasn’t cheap. MTN South Africa recorded an 8.6% decline in earnings before interest, tax, depreciation and amortisation (Ebitda, a measure of operating profitability). Excluding the once-off gain on the disposal of towers in South Africa, Ebitda declined by 6.8%, dragging the margin down by 4.5 percentage points.
“This was impacted by top-line pressures on the business (compounded by load shedding) and higher operating expenses, largely driven by rising inflation and power costs. We continued to execute our aggressive cost efficiency drive to maintain our margins to mitigate these impacts. Profit before tax fell by 58.1% to R1.5-billion due to pressure from rising interest rates and a deterioration in the rand/dollar exchange rate.
MTN South Africa deployed capex of R4.1-billion, excluding leases, in the latest reporting period. “This has been critical in driving network resilience and capacity, which has led to improved network availability and NPS scores (a measure of customer satisfaction), as well as increased traffic on upgraded sites.
Source: techcentral
In other news – Nadia Nakai opens up on reuniting with her dad
Rapper Nadia Nakai said she recently reunited with her dad who she hadn’t seen in 30 years. The rapper told Zingah on Choppin It With Buddha T’s podcast that her dad reached out to her when he saw the news about the late rapper AKA’s death.
It was actually a good meeting, it was wholesome, it was nice. I didn’t have anger because I feel like I lived a good life with my mom. Read more
