Telecommunications firm MTN Group posted resilient financial results for third quarter of 2022 on the back of strong performance from its two largest markets, the South African and Nigerian operations.

During the period under review, MTN reported group service revenue growth of 14.3%, in line with its medium-term targets, with group voice, data and fintech revenue increasing 2.7%, 33.2% and 12.9% respectively.

“Growth in data traffic and fintech transaction volumes continued to be strong, demonstrating that structurally higher demand for data and fintech services in our markets was sustained during this challenging period,” says MTN Group CEO and president Ralph Mupita.

“In the near term, revenue growth has been impacted by new taxes in a few markets, but we continue to see the case for structural and compelling growth for fintech services in the medium term that will deepen financial inclusion across Africa.”

Data traffic surged 39.7% to 8 836.4 Petabytes and the number of transactions through its fintech ecosystem increased 32.7% to 9.5-billion.

“We are encouraged that demand for data is being sustained at structurally higher levels. To support this, we deployed R23.8-billion of capital expenditure in the period to sustain our second-to-none networks and technology platforms, prioritising the coverage and capacity of our fourth-generation (4G) networks and the rollout of fifth-generation (5G) sites,” he says.

In Nigeria, MTN deployed 218 5G sites and, in South Africa, the company rolled out 483 5G sites, bringing the total 5G sites across the group to 824 sites by the end of September.

“Growth in the period was supported by solid contributions from our larger operations where data underpinned service revenue growth.”

Service revenue from MTN South Africa edged up 3.5%, impacted by loadshedding and revenue concessions that supported the recapitalisation of national roaming customer Cell C.

MTN Nigeria’s service revenue, meanwhile, increased 20.7%, owing to its strong commercial momentum during the third quarter of the year, while the group’s other regions sustained top line growth in the double digits.

Overall MTN Group subscribers increased 6.8% to 284.9-million, with the fintech business’s customer base increasing 23.3% to 63-million.

MTN South Africa, the company’s second-largest contributor to group service revenue after MTN Nigeria, increased its subscriber numbers by more than 800 000, or 8.1%, to 35.9-million in the period to September 30.

MTN South Africa’s enterprise business continued to expand, delivering service revenue growth of 19.7%.

“The consumer postpaid business was resilient, with growth of 4.2%. The rising cost of living and the impact of loadshedding was felt most acutely in the consumer prepaid market, where service revenue grew by 0.4% in the period,” Mupita comments.

However, amid the unprecedented loadshedding, which negatively affected network availability, MTN South Africa expanded its market share, delivered an encouraging underlying service revenue growth, maintained strong expense controls and investment in network resilience and expanded its 5G coverage.

MTN Group’s listed subsidiaries in Nigeria, Ghana, Rwanda and Uganda contributed to the overall increase of 14.3%, in constant currency, to R144-billion in MTN Group’s service revenue; strong growth in data traffic and fintech transaction volumes; and the 14.7% expansion of the group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) profit margin to 45.3% in an environment of elevated energy and general inflation.

“MTN Group sustained positive operating leverage in the period with Ebitda up by 14.7%, representing an improvement in the Ebitda margin of 0.3 percentage points to 45.3% that was supported by disciplined cost control. Our expense efficiency programme delivered R2.8-billion of savings in the year-to-date,” Mupita says.

Further, according to Mupita, the Group maintained a strong balance sheet with the early partial settlement of $300-million of 2024 Eurobonds, resulting in lower hard currency debt and reducing the holding company leverage to 0.8x.

“The group’s liquidity position remained strong with cash and committed undrawn facilities totalling R59-billion. Cash upstreaming of R11.5-billion from operations in the first nine months of the year was further improved with R1.5-billion in cash repatriated from Nigeria in October 2022, after the period close,” he adds.