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MTN Nigeria today announced that its subsidiary, Yello Digital Financial Services Limited (“YDFS”) has been granted a full Super Agent Licence by the Central Bank of Nigeria.

The Super Agent licence enables the scale launch of MTN Nigeria’s fintech strategy. The licence will enable MTN to convert their existing airtime agents and recruit other small businesses to distribute financial services.

YDFS received approval in principle for its Super-Agent Licence in December 2018 and has been conducting a pilot project since then to meet the conditions of a full licence. The successful pilot has now led to the granting of a full licence under which YDFS will distribute financial services to all Nigerians.

Commenting on the licence, MTN CEO Ferdi Moolman said: “We are very pleased that YDFS has been granted a Super-Agent Licence, which enables us to extend access to financial services to a much broader group of Nigerians. This forms part of our commitment to contribute towards the achievement of Nigeria’s financial inclusion goals. Through the network established by YDFS MTN is in a position to broaden the availability of financial services for the under-served across the country. This marks a very important first step in leveraging our infrastructure to scale our Fintech initiatives. We have also applied for a Payment Service Bank Licence, which will enable us in time to offer a broader and deeper range of financial services to those communities and we remain hopeful we will receive approval shortly.”

 

 

 

Highlights:

MTN Nigeria Communications Plc (“MTN Nigeria” or “the Company”) is one of Africa’s largest providers of communications services, connecting over 61 million people in communities across the country with each other and the world.

Guided by a vision to lead the delivery of a bold new digital world, MTN Nigeria’s leadership position in coverage, capacity and innovation has remained constant since its launch in 2001. MTN Nigeria is part of the MTN Group – a multinational telecommunications group which operates in 21 countries in Africa and the Middle East.

MTN Nigeria announces its unaudited results for the six months ended 30 June 2019. In January 2019, MTN Nigeria adopted IFRS 16 accounting standards in line with global best practice and adjustments are reflected in the results. All financial comparisons are year-on-year (YoY) unless otherwise stated. All subscriber numbers are compared to end of December 2018 unless otherwise stated. This announcement is the responsibility of the MTN Nigeria board of directors.

 MTN Nigeria CEO, Ferdi Moolman comments:

“In the first half of 2019, we sustained a solid performance, delivering double-digit growth in service revenue, underpinned by growth in voice and data revenue. We added 3.3 million customers to our network, increasing our subscriber base to 61.5 million. Pleasingly, we saw data subscribers increase in the period by 2.1 million to 20.7 million.

We made significant network investments to improve network quality and expand our 4G coverage. Our recent work to revamp our data prices and accelerate our 4G network has put us in a strong competitive position to offer more value to our customers, supporting data and voice revenue growth which will ultimately strengthen our business.

We are pleased with obtaining a super-agent licence from the Central Bank of Nigeria, which will enable us to build an agent network and accelerate the growth of our fintech business.

In May, MTN Nigeria was successfully listed on the Nigerian Stock Exchange (NSE), making us the first mobile network operator to list on the NSE. The listing demonstrates our commitment to the Nigerian market and provides local investors with an opportunity to participate in and benefit from the company’s growth prospects.

We made changes to our board following the retirement of six pioneer non-executive directors on the expiration of their tenure and in compliance with applicable corporate governance codes. We express our heartfelt appreciation to our outgoing directors for their contributions to the success of the company. We also welcome the incoming directors whose combination of extensive experience across the worlds of technology, finance, regulatory and policy development and corporate governance offers a hugely synergistic set of skills that will be of great benefit to us as we move into a new phase of growth.

Our Chief Financial Officer, Mr. Adekunle Awobodu has indicated his intention to resign from the position of the CFO of the company in the second half of 2019 for family-related reasons. The identification of a suitable successor has reached an advanced stage to facilitate a seamless transition. To ensure continuity on certain projects, Mr Awobodu has graciously accepted to continue to support the company on a consultancy basis. The board extends its appreciation to Mr. Awobodu for his contributions to the growth of the company.

In line with our dividend policy guidance at listing, the board has approved a maiden interim dividend as a listed company, of N2.95 kobo per share to be paid out distributable net income.”

Operational review

MTN Nigeria delivered a solid performance, with strong voice (+11.4%) and data revenue (+31.7%) driving double-digit service revenue growth and further improving the margin on earnings before interest, taxation, depreciation and amortization (EBITDA).

Voice revenue growth was supported by an increase in subscribers (+5.7%), relatively stable tariffs and our focus on pro-consumer activities. This was boosted by our targeted customer value management (CVM) initiatives. Data revenue growth was driven by an increased number of smartphones on the

network, greater data usage and growth in the number of active data users. We added 2.5 million smartphones, increasing smartphone penetration by 2.1pp to 39.2%. Active data subscribers increased by 11.0% to 20.7 million and data traffic rose by 67% YoY.

Our fintech business continued to gain momentum with 21.2% growth in revenue YoY. The super-agent licence will allow us to leverage our established distribution channels to offer a wide range of mobile financial services. We will continue to work towards obtaining a payment service banking licence that we applied for in late 2018. Digital revenue continued to be impacted by the optimisation of value-added services (VAS). However, our focus is to build a sustainable base of active digital users in order to boost revenue growth. Our enterprise business also delivered satisfactory results, with revenue increasing by 31.3%, to contribute 11.9% to service revenue.

We recorded an EBITDA margin of 53.8% on account of the implementation of IFRS 16. On an IAS 17 basis, operating expenses increased by 9.7%, below inflation. The 1.5pp improvement in the EBITDA margin was supported by a stable naira against the US dollar benefiting our operating expenses as well as lower digital expenses arising from our VAS optimisation initiatives. Our bottom line remained strong with 30.9% and 34.8% growth in profit before and after tax respectively, while earnings per share increased by 34.8% to 486 kobo.

Corporate and legal matters

The hearing on the Attorney General of the Federation (AGF) matter, which was originally scheduled to be held on June 26, 2019 for commencement of trial on the substantive issue before the court was adjourned to October 29 and 31 2019. We remain resolute that MTN Nigeria has not committed any offence and will continue to defend this position.

The redemption of MTN Nigeria’s preference shares has always been envisaged as a necessary part of the simplification of our capital structure. The redemption process is underway and will be completed after necessary regulatory process.

 Outlook

Our overriding priority for the rest of the year is to focus on our BRIGHT strategy to build a sustainable business and create value for customers. We will continue to progress in the second half of the year, making improvements to our network experience, subscriber growth and enhance operational efficiency. We expect lower data pricing and our acceleration of the 4G network expansion to bolster the acquisition of customers and data traffic volumes in the second half.

This announcement is only a summary of the information in the full announcement and does not contain full or complete details. Please visit https://www.mtn.com/investors/more-in-investors/nigeria/ for the unaudited results for the six months ended 30 June 2019.

MTN Group has appointed Thato Motlanthe to the position of Executive for Investor Relations, with effect from 1 September 2019. Thato replaces Nik Kershaw who left MTN Group at the end of May 2019, and will report to Ralph Mupita, MTN Group CFO.

Thato brings to the role extensive experience of South African and global capital markets, having worked in both the sell-side and buy-side of equity capital markets. He joins MTN from Absa Asset Management, where he held the role of Portfolio Manager, co-managing the flagship funds within the Equities franchise. Prior to this, he has held senior positions at STANLIB Asset Management, Citigroup Global Markets and UBS Investment Bank over a career spanning 16 years.

“I am excited to join a company with an incredibly strong pan-African and Middle East footprint, great market positions and attractive assets. MTN Group is well positioned to capture growth from digital and financial inclusion”, said Thato.

Commenting on Thato’s appointment, MTN Group CFO Ralph Mupita said, “We are pleased to have secured someone of Thato’s experience and leadership profile. Thato will play a critical role in the management and building of the investor base for MTN Group, as well as ensuring that the communication of the investment case of our “Digital Operator” strategy remains clear and compelling for stakeholders.”

MTN Group today announces the appointment of Yolanda Cuba as Group Chief Digital and Fintech Officer. Yolanda will join the MTN Group Executive Committee reporting to the Group CEO Rob Shuter. In this role Yolanda will lead the Group’s strategic expansion of its financial services and digital solutions efforts and transformation into a digital operator.

Yolanda brings extensive telecommunications and leadership experience to MTN Group. She joins MTN Group from Vodacom, where she served as Chief Officer of Strategy and M&A. She was previously the CEO of Vodafone Ghana for a three-year period, a role that saw her named Telecom CEO of the Year in 2018.

“This role gives me the opportunity to drive digital innovation and financial inclusion across the Group’s vast footprint. I’m really looking forward to the new challenge and being part of the MTN leadership team”, said Yolanda.

Rob Shuter said, “We are very pleased to bring an executive of Yolanda’s calibre into MTN Group. Yolanda is a highly qualified and experienced executive, with a unique combination of operational telecommunications experience as well as finance, financial services and digital skills. I am confident that Yolanda’s leadership will place us in good stead as we intensify our efforts to build a digital ecosystem and scale our fintech offering across our markets”.

Under Yolanda’s leadership, MTN will continue to progressively grow the fintech and digital opportunities in Africa as we see these areas as major drivers of our BRIGHT growth strategy. Yolanda’s start date will be communicated in due course.

MTN Group has announced that GlobalConnect, the company’s wholesale infrastructure company, is now an operating company (Opco) of the group. The Opco, headquartered in Dubai, will continue to be led by current CEO Frédéric Schepens.

MTN GlobalConnect was established in 2017 as the main driver and commercial vehicle for the consolidation of MTN’s international and national major wholesale activities. To further enable its growth, and in line with the group’s strategic focus on wholesale, the operational structure of GlobalConnect was revised, resulting in its establishment as an Opco.

Commenting on the development, MTN Group COO, Jens Schulte-Bockum said, “I am pleased that after less than two years of operation, MTN GlobalConnect has exceeded expectations, growing its customer base and revenue ahead of targets. I have no doubt that the team, led by Frédéric will continue to build on their gains to drive value to our operations, and lead MTN’s ambition to build Africa’s leading wholesale company.”

Offering the most complete backbone network in Africa, the company provides reliable solutions for fixed connectivity and international mobile services and is the single-entry point to the largest network infrastructure on the continent.

Furthermore, the company’s robust MTN.net and IP/MPLS network includes:

Driven by the belief that everyone deserves the benefits of a modern connected life, GlobalConnect strives to enable services that create significant value for other MTN Opcos, partners and third parties looking to gain from the growing opportunities in the Middle East and Africa.

MTN Group is proud to announce the launch of Africa’s first Mobile Money (MoMo) artificial intelligence service or “chatbot”. The chatbot went live in Ivory coast in May and will be rolled out across MTN’s MoMo footprint in the next few months.

The artificial intelligence mobile money “assistant” enables customers to engage with MTN’s MoMo services, including payments, on various social media platforms such as WhatsApp and Facebook Messenger, and via SMS. The service will also be included over time, in MTN’s own newly released advanced instant messaging service “Ayoba”. The chatbot is an artificial intelligence guide that assists users to navigate MTN’s MoMo services and provide other useful information. This innovation leverages messaging and artificial intelligence to drive customer engagement and enhance their MTN MoMo experience.

Commenting on the launch, MTN Group President and CEO, Rob Shuter said, “We are passionate about bringing the power of our mobile money solutions to more than 60 million customers across Africa over the next few years. Harnessing modern technologies like artificial intelligence can improve in scale, how MTN interacts with customers, enabling them to reach us anytime and anywhere, through a variety of channels including social networks and messaging applications. We can also harness the power of artificial intelligence to provide our customers with the right answers to their questions at the right time.”

Shuter added, “We are committed to improving financial inclusion with a range of solutions aimed at addressing the needs of various market segments. While MTN has made great strides in these areas, we will continue working to deliver our vision for MTN to become one of the largest Fintech players across our footprint.”

MTN Group (MTN) has noted recent media stories, based on a Bloomberg report, which carry unsubstantiated rumours and inaccuracies that the PIC is pushing for changes to the Board of MTN.

MTN regularly engages with its shareholders where we have robust, constructive, open and transparent discussions about the business. A key part of that engagement is the governance roadshow with investors that, over the last two years, has been held ahead of the AGM. During these roadshows MTN Group engages with the PIC and other major investors on matters of governance, strategy and financial performance.

With regard to the Bloomberg report concerning the MTN Chairman Phuthuma Nhleko, contrary to what the story alleges, the PIC requested that the board consider extending Phuthuma Nhleko’s term longer than he had originally intended to remain Chairman. MTN Group applied its mind on the request, and considering other issues around the board evolution, asked Phuthuma Nhleko to stay until the 15 December 2019 to ensure an orderly hand-over to the Chairman designate, Mcebisi Jonas.

The MTN board evolution and the setting up of the International Advisory Board (IAB) were communicated to shareholders and broader stakeholders on 3 May 2019 following a proposal by the nominations committee of the board and approved by the board as standard good governance. These changes were discussed with major shareholders during this year’s governance roadshow ahead of the 2019 AGM, with the PIC supportive of the changes.

The board evolution and rotation of non-executive directors was done in line with the King IV Guidelines and strengthens expertise and perspectives to ensure that the business has the appropriate skills and experience as the business executes on its strategy and ambition to be the leading digital operator in Africa and the Middle East. The process of the board evolution has been ongoing and was commented on in the 2017 Integrated Report released last year.

Similarly, the primary purpose of the IAB is to provide general global and/or sector specific perspectives that may enrich the perspectives of the operating company’s Board as it strives to contribute to certain areas of development in the countries in which it operates.

The construct of an IAB is one that is adopted by a number of global multinationals that operate in varied and multiple jurisdictions across the world.

While this is not prevalent in South African domiciled companies, such Boards advise a number of global companies quoted on major global bourses. The IAB was conceptualised by the MTN Board before the PIC increased its shareholding in MTN.

MTN Group remains appreciative of the support it has always had from the PIC as a major and long-standing shareholder of the business.

Africa and the Middle East, which are home to MTN’s 21 markets are characterised by an ever-increasing youthful population. While this dynamic presents exciting potential, it also poses some challenges, one of which is youth unemployment.

It is against this backdrop that MTN hosts its 13th edition of 21 Days of Y’ello Care, its annual employee volunteerism programme which runs from 1 to 21 June across the company’s footprint. MTN recognises the enormous potential that young people have to drive economic growth and help their communities to thrive. Hence the company will continue with youth empowerment as its theme for the 2019 Y’ello Care campaign.

Commenting on the campaign, MTN Group Executive for Corporate Affairs, Nompilo Morafo, said: “We believe that if we all join forces, youth empowerment can be realised and the prevalence of youth unemployment eradicated. Our goal for this year’s Y’ello Care programme is to do our part to support young people and help tackle various issues they face.”

Morafo adds, “As the leading mobile operator in emerging markets and given our understanding of the transformative power of digital innovation, we constantly seek opportunities to connect people with technology, so that all our stakeholders can enjoy the dividends of the digital age. As we embark on the Forth Industrial Revolution, we wish to help equip the youth with the skills and knowledge they require to effectively prepare themselves for the digital future.”

Some initiatives that MTN’s operations will engage in include: the establishment of an ICT hub for youth by MTN Business Kenya, computer skills training and an entrepreneurship fair hosted by MTN Benin, aimed at supporting young people to improve their employability. MTN Cameroon’s employees will help construct a multi-disciplinary skills enhancement training centre, while employees in Afghanistan will build a network-based research centre for students in the Information and Communication Technology Institute.

All participating Opcos stand in line to win monetary prizes, which are to be re-invested into community upliftment programmes in their market. These include the Group President & CEO prize of US$100 000, while the two recipients of the Vice President regional awards will each receive US $30 000.

MTN confirms that the President of the Republic of Uganda, His Excellency, Yoweri Kaguta Museveni has exercised executive discretion to permit MTN CEO, Wim Vanhelleputte’s unconditional return to Uganda.

MTN wishes to express its gratitude to His Excellency, the President of the Republic of Uganda and all stakeholders for their support and goodwill for making this possible.

MTN Uganda is a law-abiding corporate citizen and is committed to continue to play its part in the development of Uganda.

MTN is thrilled to announce that it has been named the most admired brand by Brand Africa 100, based on spontaneous consumer responses.

The seventh annual Brand Africa 100 report was released on 24 May 2019, featuring the top 100 most admired brands in Africa.

Ranked number eight in the top 100 most admired brands in Africa, MTN is the only African brand in the top 10, as well as the most admired telecommunications brand on the continent. Furthermore, within the financial services category, MTN Mobile Money is in the Top 20 at number 19, up one position from 2018. MTN is also the overall number one brand in Rwanda and Liberia, and the number one Johannesburg Stock Exchange listed brand in the Brand Africa 100 rankings.

Brand Africa 100 is a pan-African survey and ranking of Africa’s Best Brands developed by Brand Leadership. The rankings are based on a comprehensive survey by Geopoll, a global leader in providing high quality market research in emerging markets, and strategic analysis and weighted consumer admiration ranking by Kantar, the world’s leading data, insights and consulting company and Brand Leadership, Africa’s leading branding and integrated marketing communications advisory.

The 2018/19 study surveyed consumers from 25 countries in Africa (12 of which are MTN markets). Together these countries represent 85% of Africa’s population and 85% of GDP.

Commenting on the accolade, Bernice Samuels, MTN Group Executive for Marketing said, “This is such an honour for MTN and I wish to thank our customers on the continent for their support over the years, which has seen us being ranked as the most admired African Brand yet again.”

Samuels adds, “With Africa being a young continent, young Africans want to experience a modern, digital, connected life. We are doing everything we can to make this a reality by leading the delivery of a bold new digital world in ways that are relevant to our customers.”

“MTN is committed to brightening lives every day by being a responsive, customer and community focused company.  Through the MTN Foundations we work together with communities to create opportunities to advance growth and development by supporting health and education initiatives and national development priorities. We are also working hard to deliver the best customer experience in voice, data, digital and financial services so that consumers across our footprint continue to choose us as their most admired and preferred brand.”