Wrap Text
Reviewed condensed consolidated financial results for the six months ended 30 June 2018
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number:1994/009584/06)
(Share code:MTN)
(ISIN: ZAE000042164)
("MTN" or "the group")
Reviewed condensed consolidated financial results for the six months ended 30 June 2018
MTN is a leading emerging market mobile operator, serving 223,4 million subscribers in
22 countries across Africa and the Middle East. We believe that everyone deserves the
benefits of a modern connected life.
Salient features
- Service revenue up 10,2%*
- Data revenue up 26,7*
- Subscribers at 223,4 million, active data users at 71,2 million
- Active MTN Mobile Money customers to 24,1 million
- EBITDA up 17,0%*
- EBITDA margin up 2,2 percentage points to 35,5%*
- Capex up 20,0%*
- Basic HEPS of 215 cents** from 231 cents**
- Adjusted free cash flow up 14,4%*
- Interim dividend of 175 cents per share declared
* Constant currency information after accounting for the impact of the pro forma adjustments
as defined.
** Reported.
Any forward looking financial information disclosed in this results announcement has not been reviewed
or audited or otherwise reported on by our external joint auditors
Service revenue excludes device and SIM card revenue
Data revenue is access data and enterprise business unit access data revenue
Adjusted free cash flow = EBITDA less capex
All financial numbers are year on year (YoY) unless otherwise stated
All subscriber numbers are compared to end December 2017 unless otherwise stated
2017 comparatives are restated for the adoption of IFRS 15 and change in the presentation of cash flows
Certain information presented in these results constitutes pro forma financial information. This is presented for
illustrative purposes only. Because of its nature, the pro forma financial information may not fairly present MTN's
financial position, changes in equity, and results of operations or cash flows. It has not been audited or reviewed
or otherwise reported on by our external joint auditors.
1. The financial information presented in these consolidated financial results has been prepared excluding the impact
of hyperinflation and the relating goodwill and asset impairments, tower profits (including the profit realised on the
exercise of the IHS exchange right whereby the group's interest in the Nigeria tower company was exchanged for
additional shareholding in IHS Holding Limited), and the Nigerian regulatory fine (consisting of the remeasurement impact
when the settlement was entered into and the finance costs recognised as a result of the unwind of the initial discounting
of the liability) (the pro forma adjustments) and constitutes pro forma financial information to the extent that it is not
extracted from the segment disclosure included in the reviewed condensed consolidated interim financial statements for
the six months ended 30 June 2018. This pro forma financial information has been presented to eliminate the impact of the
pro forma adjustments from the consolidated financial results to achieve a comparable analysis year on year. The pro
forma adjustments have been calculated in terms of the group accounting policies disclosed in the consolidated financial
statements for the year ended 31 December 2017, except for the changes in accounting policies as a result of the
adoption of the accounting pronouncements effective 1 January 2018.
2. Constant currency information has been presented to illustrate the impact of changes in currency rates on the
group's results. In determining the change in constant currency terms, the current financial reporting period's results
have been adjusted to the prior period average exchange rates determined as the average of the monthly exchange rates.
The measurement has been performed for each of the group's currencies, materially being that of the US dollar and Nigerian
naira. The constant currency growth percentage has been calculated based on the current year constant currency results
compared to the prior year results. In addition, in respect of MTN Irancell, MTN Sudan, MTN South Sudan and MTN Syria,
the constant currency information has been prepared excluding the impact of hyperinflation. The economies of South Sudan
and Syria were assessed to be hyperinflationary and hyperinflation accounting was applied for the period under review.
The joint independent auditors' review does not report on all of the information contained in this announcement/financial
results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the joint independent
auditors' engagement they should obtain a copy of the joint independent auditors' review report together with the accompanying
financial information from MTN's office.
The group's results are presented in line with the group's operational structure. This is South Africa, Nigeria, the
Southern and East Africa and Ghana (SEAGHA) region, the West and Central Africa (WECA) region and the Middle East and
North Africa (MENA) region and their respective underlying operations.
The SEAGHA region includes Ghana, Uganda, Zambia, Rwanda, South Sudan, Botswana (joint venture - equity accounted),
Swaziland (joint venture - equity accounted) and Business Group. The WECA region includes Cameroon, Ivory Coast, Benin,
Congo-Brazzaville, Liberia, Guinea Conakry and Guinea Bissau. The MENA region includes Iran (joint venture - equity
accounted), Syria, Sudan, Yemen, Afghanistan and Cyprus.
Although Iran, Botswana and Swaziland form part of their respective regions geographically and operationally, they are
excluded from their respective regional results because they are equity accounted for by the group.
Group president and CEO, Rob Shuter comments:
"MTN had an encouraging first half of 2018, with an acceleration in the second quarter, supported by an improved
operational performance across many markets. This was led by Nigeria, Ghana and South Africa. Service revenue growth
increased, driven by robust voice revenue growth and the continued expansion of data and digital revenue. This in turn
was supported by a 2,8% increase in subscriber numbers, continued network rollout, increasing 3G and 4G population
coverage and improving customer service.
"We resolved some key regulatory issues in Cameroon and Benin, launched the initial public offering (IPO) of MTN Ghana
and made progress on the IPO of MTN Nigeria. As part of our ongoing portfolio review, we agreed to the sale of MTN Cyprus.
In the period, we further strengthened our governance of risk, continued to boost our specialist skills base, recorded
improvements in employee engagement and extended mobile internet access to more people.
"Despite continued challenges in repatriating funds from MTN Irancell, the board remains committed to plans to declare
a total dividend of 500 cents per share for 2018 and is targeting growth of 10% to 20% over the medium term. We believe
everyone deserves the benefits of a modern connected life and see opportunity to provide this. We are confident that
MTN remains well placed to deliver on our medium-term guidance."
Overview
MTN reported improved constant currency results for the six months ended 30 June 2018, delivering broadly on our
medium-term targets as we remained focused on executing our BRIGHT strategy. Growth in service revenue accelerated,
margins on earnings before interest, taxation, depreciation and amortisation (EBITDA) increased, and voice, data
and digital revenue continued to expand.
Particularly noteworthy was the 38,6%* year-on-year (YoY) growth in second quarter EBITDA in Nigeria and 8,6%*
increase YoY in South Africa. In Ghana, the second quarter EBITDA was up 13,6%* YoY after the introduction of the
management fee from 1 May 2018.
Macroeconomic conditions remained challenging in South Africa, Iran and Cameroon; however, these were supportive in
Nigeria, Ghana and Uganda. The South African economy had a poor start to the year, contracting 2,2% in the first quarter.
Nigeria's economy expanded by 1,9% in the same period on the back of improved oil production and oil prices and greater
foreign exchange liquidity. Iran's economy felt the impact of the US decision to withdraw from the Joint Comprehensive
Plan of Action (JCPOA) agreement, and foreign currency remained in short supply. Many markets, particularly those in the
Middle East, continued to experience socio economic challenges.
Among key currency moves, the rand's average rate strengthened 7,7% against the US dollar YoY and 22,6% against the
Nigerian naira. In April 2018, Iran unified the official and open market exchange rates of the rial, leading to an
effective 19,4% depreciation against the dollar.
Against our medium-term target of upper-single-digit growth in group service revenue, we delivered a 10,2%* increase
in constant currency terms. This was led by growth of 17,0%* by MTN Nigeria, 27,9%* by MTN Ghana and 2,9% by MTN South
Africa. Among our large operations, MTN Uganda also contributed positively; however; MTN Cameroon and MTN Ivory Coast
reported declines.
At 30 June 2018, the group had 223,4 million subscribers. This compares to 217,2 million at the end of 2017.
Robust voice revenue growth, along with the continued expansion of data and digital revenue, supported overall service
revenue growth. Voice revenue increased by 6,2%* in the period, evidence of our targeted customer value management
(CVM) efforts as well as the continued shift in Nigeria of voice growth as we optimised our value-added service (VAS)
offerings. Data revenue expanded 26,7%* as we continued to record improvements in the quality and capacity of our data networks
after committing R11 461 million** in capital expenditure (capex). We rolled out a total of 3 603 3G and 3 660 4G sites.
This supported data adoption, and at the end of June 2018 we had 71,2 million active data users.
Digital revenue increased by 7,6%*, underpinned by the greater uptake of MTN Mobile Money (MoMo), but negatively
impacted by lower VAS revenue. At the end of June 2018, we had 24,1 million active MoMo users in 14 markets. MoMo revenue
increased by more than 50% YoY. We continued to focus on our rich-media service offerings.
Over the medium term, we target improved profit margins. In the first half, the group's margin on EBITDA expanded by
2,2 percentage points (pp) to 35,5%*.
The reported EBITDA margin was 35,6%** compared to 38,2%** in June 2017. It was positively impacted by a net gain on
the dilution of our investment in Iran Internet Group (IIG), following the entry of a new investor into that business.
It was also supported by the reversal of fixed and intangible asset impairments (excluding goodwill) for MTN Sudan of
R306 million** previously booked under hyperinflation accounting. The reported EBITDA margin was negatively impacted
by currency fluctuations.
Reported basic headline earnings per share (HEPS) declined to 215 cents** from 231 cents** in the first half of 2017. HEPS
were negatively impacted by a swing of 21 cents in the contribution from associates and joint ventures.
HEPS were also impacted by the significant items in the first half: 17 cents relating to the Nigeria fine
interest (from 24 cents in first half 2017); hyperinflation (excluding impairments) of 27 cents (from 42 cents in first
half 2017); and the impact of foreign exchange losses and gains of 21 cents (from 49 cents in first half 2017).
HEPS excluding these aforementioned items declined to 280 cents from 346 cents.
On 29 May 2018, MTN Ghana launched its IPO. This is part of the operation's plan to introduce a broad base of
Ghanaians as investors and, in so doing, fulfil a requirement of its 4G licence. The offer period closed on 31 July 2018.
Potential investors could apply for shares using MTN Mobile Money - the first mobile financial services platform to
be used for an IPO. MTN Ghana is expected to list on the Ghana Stock Exchange by 5 September 2018, subject to final
regulatory and corporate approvals.
As part of the ongoing review of our portfolio, in July 2018 we signed an agreement to sell 100% of MTN Cyprus, which
is reflected in our accounts as a 'disposal group held for sale'. The net sale proceeds of approximately €260 million
(approximately R4,17 billion using the closing exchange rate at 30 June 2018) will be paid upfront. We expect the sale
to close within the third quarter of 2018. MTN Cyprus is MTN's only operating business in the European Union and falls
outside our core footprint of Africa and the Middle East.
Our e-commerce joint ventures continued to grow. Within Africa Internet Holding (AIH), online shopping site Jumia
continued to report solid top-line growth. In the first half of 2018, it recorded a 92% YoY increase in new customers
to more than a million and an 80% increase in orders to around four million. The increase in gross merchandise value
was 66%. This was powered by a 50% increase in active merchants to 47 000 and an 880% increase in SKUs to more than
12 million items.
Within Middle East Internet Holding, online retailer Wadi's recently launched grocery delivery service became the
market leader in Saudi Arabia. Ride-hailing service Jeeny recorded a 33% YoY increase in ride numbers and cleaning
service app Helpling increased bookings by 70% YoY.
Within IIG, in the first half of the year, cab-hailing and online food ordering service app Snapp reached 1,2 million
daily rides and 27 000 delivered food orders a day. Hotel reservation app Snapptrip became the number one player in
the Iran hotel booking market.
Regulatory and legal considerations
We tackled various regulatory matters in the period. MTN Cameroon renegotiated its licence agreement as part of an
addendum for the usage of 4G spectrum. MTN Benin concluded a memorandum of understanding with the government as well as
negotiations around future frequency fees.
In South Africa, we continued to engage with the authorities on proposed amendments to the Electronic Communications
Act. We are working to find a solution that would best deliver the most cost-effective coverage for South Africans as
well as resources for the national fiscus. We await cabinet's decision on the future of spectrum allocation.
On 1 June 2018, representatives of the South African Directorate for Priority Crime Investigation (the Hawks) visited
our offices and those of our external legal counsel to obtain documents relating to aspects of the Turkcell litigation
currently before the South Gauteng High Court. This lawsuit was initiated in 2013 by Turkcell Iletisim Hizmetleri A.S.
and East Asian Consortium. It relates to Turkcell's alleged grievances arising from its unsuccessful bid to obtain a
mobile licence in Iran, and the awarding of that licence to MTN Irancell in 2005. MTN believes there is no legal merit to
Turkcell's claim and will continue to oppose it.
On 8 May 2018, the US announced its decision to withdraw from the JCPOA agreement and to re-impose economic sanctions
against Iran. The first round of these sanctions became effective on 7 August 2018 and a second phase of sanctions is
expected to be effective on 5 November 2018. The sanctions may limit the ability of the group to repatriate cash from
MTN Irancell, including future dividends. As at 30 June 2018, Iranian rial-denominated dividends receivable and loans
amounted to R3,4 billion. The official exchange rate to the US dollar was 42 490 rials at 30 June 2018 and has remained
largely unchanged since April 2018. Sanctions may place pressure on the official exchange rate that is used to translate
dividend and loan receivables as well as the equity-accounted results of MTN Irancell. We will continue to monitor the
situation including the response of the Iranian authorities and the other JCPOA members.
As previously reported, so far during 2018, MTN Group has repatriated approximately €88 million from MTN Irancell,
including €61 million relating to the full 2017 dividend due to MTN as well as a further €27 million of historic dividends.
Opportunities for repatriation within the legislative framework continue to exist, however MTN Group has not factored
these into our cash flow forecasts.
Dividends
The board has declared a gross interim dividend of 175 cents per share.
Prospects and guidance
Well positioned to deliver growth
MTN is a leading operator in one of the world’s fastest-growing regions. Guided by our clearly defined strategy, we are well
positioned to grow by leveraging our scale and enhancing our competitive position. With our expanding data coverage and drive
to accelerate smartphone adoption, we will take advantage of the material data and digital opportunity in our markets. As we
build operational momentum, we will intensify our focus on our digital businesses in the future.
In the next few years we expect to widen our group EBITDA margin. We also target upper-single-digit growth in constant currency
service revenue, driven by double-digit growth from MTN Nigeria and mid-single-digit growth from MTN South Africa.
Our extensive capital investment programme in recent years has sharply improved our network performance in many markets. This has
supported our efforts to provide the best customer experience and to grow through enabling greater adoption of data and digital services.
We expect the group capex intensity, which measures our efficiency in deploying assets, to moderate over the medium term to within a
target range of 20% to 15%. At end-June 2018 it was 18,3%**. Our improving group margins and declining capex intensity are expected
to support improved cash flow generation for the group.
Portfolio review
We continue to review the markets in which we operate to ensure a good strategic and operational fit. We continue
to assess the cash flow performance of our operations in conflict markets, focusing on ensuring that they remain
self-funded. We are also evaluating acquisition and partnership opportunities across Africa and the Middle East.
These ongoing reviews could, over the medium term, result in some changes to our portfolio.
Listing
MTN Nigeria expects to list on the Nigerian Stock Exchange before the end of 2018, subject to regulatory approvals and
appropriate market conditions. The MTN Group expects that any reduction in its ownership of MTN Nigeria will be
limited.
Capex guidance 2018
Capitalised Capitalised1
Estimated June June
(Rm) 2018 2018 2017
South Africa 9 675 3 907 3 473
Nigeria 6 314 2 320 2 749
SEAGHA 4 021 2 219 1 566
Ghana 2 070 1 260 912
Uganda 750 392 356
Other 1 200 567 298
WECA 3 216 2 351 1 707
Ivory Coast 1 300 562 499
Cameroon 501 101 694
Other 1 460 1 688 514
MENA 1 851 572 734
Syria# 713 102 85
Sudan# 346 59 268
Other 923 411 381
Head office 76 93 76
GlobalConnect 312 - -
Total 25 510 11 462 10 305
Hyperinflation - (1) 3
Total reported 25 510 11 461 10 308
Iran (49%)# 4 517 1 622 3 850
# Excluding hyperinflation.
1 Restated to reflect segments reallocated.
Financial review
Headline earnings reconciliation
Impairment Profit on
/reversal Impair- exercise of
of PPE and ment exchange Gain on
IFRS intangible of right and dilution of
(Rm) reported assets1 goodwill2 tower profit3 investment4 Other5
1H18
Revenue 62 777 - - - - -
Other income 406 - - 12 304 11
EBITDA 22 335 244 12 304 11
Depreciation, amortisation
and impairment of goodwill 11 503 149 - - -
Profit from operations 10 832 244 (149) 12 304 11
Net finance cost 3 677 - - - - -
Hyperinflationary monetary gain 100 - - - - -
Share of results of associates and
joint ventures after tax 197 - - - 134 -
Profit before tax 7 452 244 (149) 12 438 11
Income tax expense 2 541 - - - - -
Profit after tax 4 911 244 (149) 12 438 11
Non-controlling interests 530 42 - - - -
Attributable profit 4 381 202 (149) 12 438 11
EBITDA margin 35,6%
Effective tax rate 34,1%
1H17
Revenue 64 815 - - - - -
Other income 6 090 - - 6 030 28 21
EBITDA 24 781 (2 786) 6 030 28 21
Depreciation, amortisation and
impairment of goodwill 14 374 - 2 631 - - -
Profit from operations 10 407 (2 786) (2 631) 6 030 28 21
Net finance cost 3 457 - - - - -
Hyperinflationary monetary gain 67 - - - - -
Share of results of associates and
joint ventures after tax 579 - - - - -
Profit before tax 7 596 (2 786) (2 631) 6 030 28 21
Income tax expense 2 416 (157) - - - -
Profit after tax 5 180 (2 629) (2 631) 6 030 28 21
Non-controlling interests (280) (486) - - - -
Attributable profit 5 460 (2 143) (2 631) 6 030 28 21
EBITDA margin 38,2%
Effective tax rate 31,8%
Headline earnings reconciliation (continued)
Hyper-
inflation
Nigeria (excluding %
regulatory impair- Forex move-
(Rm) fine6 ment)7 losses8 Adjusted ment
1H18
Revenue - 65 - 62 712 (3,1)
Other income - - - 79 NM
EBITDA - 1 - 21 763 1,3
Depreciation, amortisation
and impairment of goodwill - 91 - 11 263 0,4
Profit from operations - (90) - 10 500 2,2
Net finance cost 396 (1) 600 2 682 88,2
Hyperinflationary monetary gain - 100 - -
Share of results of associates and
joint ventures after tax - (540) - 603 (50,6)
Profit before tax (396) (529) (600) 8 421 (16,3)
Income tax expense - (15) (160) 2 716 (8,6)
Profit after tax (396) (514) (440) 5 705 (19,6)
Non-controlling interests (84) (23) (71) 666 (23,2)
Attributable profit (312) (491) (369) 5 039 (19,1)
EBITDA margin
Effective tax rate
1H17
Revenue - 71 - 64 744
Other income - - - 11
EBITDA - 5 - 21 483
Depreciation, amortisation and
impairment of goodwill - 530 - 11 213
Profit from operations - (525) - 10 270
Net finance cost 537 (15) 1 510 1 425
Hyperinflationary monetary gain - 67 - -
Share of results of associates and
joint ventures after tax - (641) - 1 220
Profit before tax (537) (1 084) (1 510) 10 065
Income tax expense - (49) (350) 2 972
Profit after tax (537) (1 035) (1 160) 7 093
Non-controlling interests (114) (275) (272) 867
Attributable profit (423) (760) (888) 6 226
EBITDA margin
Effective tax rate
1 2018: Reversal of the hyperinflation-related asset impairment in MTN Sudan (R306 million) and exclusion of the impact
of other asset impairments.
2017: Exclusion of the impact of impairments of assets previously written up for the impact of hyperinflation for MTN
Syria (R1 125 million) and MTN Sudan (R1 690 million), partly offset by a reversal of assets previously impaired.
2 Represents the exclusion of the impact of goodwill impairment recognised
2018: In relation to MTN Yemen.
2017: In relation to MTN Yemen (R807 million), MTN Afghanistan (R841 million) and MTN Sudan (R983 million). An amount of
R192 million of the goodwill impairment on MTN Sudan relates to the carrying value of goodwill previously written up for
the impact of hyperinflation.
3 The financial impact relating to the sale of tower assets during the financial period is excluded:
2018: Release of a deferred gain of R12 million (2017: R13 million) in Ghana.
2017: Release of a deferred gain of R13 million in Ghana and R6 017 million profit realised on the exercise of the exchange
right where the interest in the Nigeria tower company was exchanged for an increased shareholding in IHS Holdings.
4 Represents the gain on dilution of the group’s investments in International Digital Services Middle East Limited following the
entry of a new investor into that business.
5 Profits earned on the disposal of items of property, plant and equipment are excluded.
6 Exclusion of finance cost recognised as a result of the unwind of the discounting of the financial liability created on conclusion
of the Nigeria regulatory fine.
7 The impact of hyperinflation is excluded for the operations that are currently accounted for on a hyperinflationary basis
(MTN Syria and MTN South Sudan) as well as those that have previously been accounted for on a hyperinflationary basis. The economies
of Iran and Sudan were assessed to no longer be hyperinflationary effective 1 July 2015 and 1 July 2016 respectively and hyperinflation
accounting was discontinued from this date onwards. For these operations the impact of hyperinflation unwind over time mainly through
depreciation, amortisation or subsequent asset impairments.
8 Adjustment for the net forex losses impacting earnings for the respective periods.
Exchange rates
The stronger average rand and the depreciation of the Nigerian naira and the Iranian rial had a negative translation
impact on rand-reported results for the period. The average naira depreciated by 13,3% against the US dollar YoY, and the
closing rate at end-June 2018 was down 0,3% in the period. The average rand strengthened by 7,7% YoY against the US
dollar and closed 9,9% weaker in the period.
Revenue
Group revenue increased 9,7%* and service revenue increased by 10,2%*, supported by growth in MTN Nigeria (up 17,0%*),
MTN Ghana (up 27,9%*), MTN South Africa (up 2,9%) and MTN Uganda (up 8,8%*). MTN Cameroon and MTN Ivory Coast
reported a 7,0%* and 6,6%* decline in service revenue respectively.
Costs
Total costs were well contained, increasing by 6,8%*. They were negatively impacted by foreign-denominated
expenses in Nigeria and costs associated with the rollout of network sites.
EBITDA
EBITDA excludes impairment of goodwill, net monetary gains and share of results of associates and joint
ventures after tax. Group EBITDA increased by 17,0%*. It was driven by increases of 31,5%*, 5,7%* and
34,7%* in MTN Nigeria, MTN South Africa and MTN Ghana respectively and lower head office costs, which
were partially offset by the performance of the WECA markets. The group EBITDA margin increased by
2,2 percentage points* to 35,5%*.
Depreciation, amortisation and impairment of goodwill
The group depreciation charge increased by 10,2%* because of higher capex over the past few years. Amortisation costs
increased by 17,6%*, after higher expenditure on software in the previous period. Non-hyperinflation-related goodwill
impairments consisted of impairments in Yemen (R149 million**).
Net finance costs
Net finance costs increased by 6,4%**. This was mainly because of lower interest income in Nigeria after the early redemption
by MTN Nigeria of treasury bonds.
Net forex losses declined by 60,3%** because of lower losses in Nigeria, after the operation settled a number of
foreign-denominated expenses. Net forex losses mainly included:
- Head office losses of R425 million; and
- Forex losses in Nigeria of R175 million incurred on US dollar-denominated third-party payables.
Share of results of associates and joint ventures after tax
We reported a profit of R197 million** from associates and joint ventures, compared to a profit of R579 million** in
the same period of 2017. This was mainly because of a 30,1%** decline in MTN Irancell's profits - a result of higher
depreciation related to network rollout, increased transmission costs and higher forex losses because of the weaker
rial. The share of results of joint ventures was also affected by the increased loss in Africa Internet Holding (AIH)
because of higher marketing and logistics costs.
Taxation
The reported effective tax rate was 34,1%**, driven higher by lower profits from associates and joint ventures as
well as non-deductible interest on the Nigeria fine. The prior year's rate had also benefited from non-taxable tower
profits. The group's reported taxation charge increased by 5,2%** YoY to R2 541 million**.
Earnings
We reported headline earnings per share (HEPS) of 215 cents** compared to 231 cents** in the comparable period.
HEPS were negatively impacted by a swing of 21 cents in associates and joint ventures. HEPS were impacted by the
following items: 17 cents relating to the Nigeria fine interest (from 24 cents in first half 2017); hyperinflation
(excluding impairments) of 27 cents (from 42 cents in first half 2017); and the impact of foreign exchange losses
and gains of 21 cents (from 49 cents in first half 2017), and reflected a decline to 280 cents from 346 cents.
Cash flow
Cash inflows from operations were slightly lower at R16 757 million**. The group repatriated R1 296 million**
in cash from MTN Irancell. Key cash outflows included cash capex of R12 549 million** and dividends paid to equity
holders of R8 098 million**.
Capital expenditure
Capex increased by 20,0%* (increased by 11,2%** to R11 461 million**) for the first half.
Financial position
Net debt increased to R69 831 million** from R57 145 million** reported at year-end, impacted by the weaker closing
rand and the payment of the final dividend under the previous dividend policy.
Operational review of key markets
MTN South Africa
- Service revenue increased by 2,9%*
- Data revenue increased by 13,5%*
- Digital revenue increased by 17,9%*
- EBITDA grew 5,7%* to R7 450 million*
- EBITDA margin increased by 0,8pp* to 35,2%*
- Capex increased by 12,5%*
MTN South Africa reported improved profitability on a strong consumer business, supported by our CVM initiatives.
However, growth in service revenue was below expectations on the slow turnaround of the enterprise business. Despite
this, we started to see a stabilisation of enterprise towards the end of the second quarter after the appointment of
new leadership. Data usage was driven by the strong uptake of social media bundles. Digital revenue grew on demand
for Xtratime and gaming.
Prepaid service revenue increased by 2,5%*, while postpaid service revenue declined by 2,5%*. Postpaid churn
stabilised. We expect an acceleration of service revenue growth in the second half, driven by improvements in the
postpaid and enterprise segments.
The subscriber base increased by 2,2% from December 2017 to 30,2 million. We continued to record network improvements.
Boosted by these, we signed a deal to provide wholesale roaming services to Cell C, which will lead to incremental
growth in revenue and EBITDA from the fourth quarter. Following the introduction of new methodology to measure NPS,
we moved to number two NPS.
Ahead of the decision of the courts on the timeline for the implementation of new data regulations, over the next
six months we will proactively implement the various changes to which we have committed.
MTN Nigeria
- Service revenue increased by 17,0%*
- Data revenue increased by 63,7%*
- Digital revenue decreased by 24,8%*
- EBITDA grew by 31,5%* to R9 094 million*
- EBITDA margin increased by 4,7pp* to 43,0%*
- Capex increased by 0,5%*
MTN Nigeria performed ahead of expectations, with double-digit growth in voice revenue driving accelerated service
revenue growth and the further widening of the EBITDA margin. Increased usage and growth in data subscribers supported
data revenue growth. Digital revenue declined as a result of further optimisation of our VAS business. Towards the end of
the second quarter, net additions and revenue growth slowed in line with economic activity, as well as some seasonality.
We expect this trend to continue in the third quarter, with an improved performance expected in the fourth quarter.
The subscriber base expanded by 5,6% from December 2017 to 55,2 million. We continued work to improve customer
experience and recorded steady growth in overall NPS, supported by our increased efforts to improve network quality and
availability. We reported an increase in the number of active MoMo customers to nearly 2,2 million. The enterprise
business performed well. We made good progress on our plans to list MTN Nigeria on the Nigerian Stock Exchange. We do
not expect any material cash inflows to the group from the IPO.
Southern and East Africa and Ghana (SEAGHA)
- Service revenue increased by 22,9%*
- Data revenue increased by 30,8%*
- Digital revenue increased by 28,6%*
MTN Ghana reported a very strong performance in the first half, continuing to benefit from the relatively buoyant
economy. Growth in voice, data and digital revenue drove a 27,9%* increase in service revenue and supported the 2,0pp*
widening in the EBITDA margin to 39,2%*. The new Ghana management fee agreement was put in place effective 1 May 2018.
MTN Ghana's strong first half performance was supported by various attractive value propositions, including the youth
activation initiative MTN Pulse. Subscribers grew by 5,5% from December 2017 to 16,5 million. The number of active
data subscribers increased by 6,1% in the same period to 6,9 million and data volumes more than doubled. This supported
a 36,7%* increase in data revenue.
MTN Ghana continued to lead the group in terms of the total number and growth of MoMo subscribers, adding 10,7% more
active MoMo subscribers from December 2017 to 7,9 million, supported by consistent service delivery across all channels.
At end-June 2018, MoMo made up 15% of revenue. In May 2018, MTN Ghana's IPO was launched and the operation is expected
to be listed, subject to final regulatory and corporate approvals, by 5 September 2018. A new CEO, Selorm Adadevoh, joined in
June 2018.
MTN Uganda increased service revenue by 8,8%*, led by a 19,7%* increase in digital revenue. Growth in MoMo revenue
exceeded expectations and profitability was supported by a reduction in commissions paid to MoMo agents. The number of
active MoMo customers on Uganda's leading brand and network NPS operator increased to 5,3 million. MoMo subscribers
made up more than half the total subscriber base of 10,5 million, which declined by 1,8%, impacted by the regulator's
ban on the sale and replacement of SIM cards between March and May 2018. The number of active data subscribers rose
to 1,8 million, helping lift data revenue by 17,8%*.
West and Central Africa (WECA)
- Service revenue decreased by 7,5%*
- Data revenue increased by 13,6%*
- Digital revenue increased by 23,0%*
MTN Cameroon's subscriber base declined by 5,9% from December 2017 to 6,6 million in a difficult operating
environment, impacted by a data shutdown and weak economic activity. Service revenue decreased by 7,0%*, affected by
the lower subscriber base and despite 15,0%* growth in data and 71,2%* growth in digital revenue. The number of active
MoMo customers increased by 10,5% from December 2017 to 1,2 million, with revenue up by 404%* YoY. EBITDA declined
by 44,1%* and the EBITDA margin narrowed 11,8pp* to 19,2%*.
MTN Ivory Coast's service revenue declined by 6,6%* on weaker voice revenue in a competitive market. Digital and data
revenue continued to expand, up by 34,7%* and 15,4%* respectively. The EBITDA margin declined by 8,5pp* to 26,8%*
because of declining voice revenue and increased interconnect costs, most notably national interconnect costs. The
subscriber base grew by 3,1% from December 2017 to 11,3 million. We led the market in brand NPS and the total number
of active MoMo customers increased by 15,8% from December 2017 to 2,5 million. MoMo revenue grew by 48,7% and data
volumes almost doubled. We completed subscriber re-identification in May 2018.
Middle East and North Africa (MENA) (excluding Iran)
- Service revenue increased by 21,6%*
- Data revenue increased by 32,5%*
- Digital revenue increased by 21,3%*
MTN Irancell (joint venture - equity accounted, 49%)
- Service revenue increased by 16,1%*
- Data revenue increased by 48,2%*
- Digital revenue increased by 4,7%*
- EBITDA increased by 16,7%*
- EBITDA margin increased by 0,3pp* to 36,5%*
- Capex decreased 45,4%*
MTN Irancell had a good first half and remained the market leader in terms of data services. Strong growth in data
revenue was the result of the extensive network rollout and optimisation during 2017, as well as the additional rollout
of 3G and 4G network sites in the first half and successful spectrum refarming, attractive segmented offers and strong
subscriber net additions as more subscribers moved to 3G-enabled devices. By end-June, of the total of 44,6 million
subscribers, 19,3 million were active data subscribers. Data traffic volumes increased by more than 110% YoY. The
enterprise business continued to record good growth. The number of subscribers using the MyMTN app increased to
6,7 million from 4,6 million in December 2017. MTN Irancell secured access to more spectrum in the 2 600MHz band.
Despite an increase in transmission costs, optimisation in other areas of the business led to total costs being
managed and this contributed to EBITDA of R6 745 million*. EBITDA was also supported by a net gain on the dilution
of the investment in IIG. This was following the entry of a new investor into that business.
Following the decision of the US to withdraw from the JCPOA, the rial has depreciated sharply and access to foreign
exchange has become more difficult, pressuring economic growth.
Board changes
We announced the appointment of three new independent non-executive directors. Swazi Tshabalala and Mcebisi Jonas
joined the board on 1 June 2018 and Dr Khotso Mokhele joined the board on 1 July 2018. We wish them well in their
new roles.
Declaration of interim ordinary dividend
Notice is hereby given that a gross interim dividend of 175 cents per share for the period to 30 June 2018 has been
declared. The number of ordinary shares in issue at the date of this declaration is 1 884 296 758 (including 9 791 839
treasury shares held by MTN Holdings and 76 835 378 shares held by MTN Zakhele Futhi).
The dividend will be subject to a maximum local dividend tax rate of 20% which will result in a net dividend of 140 cents per
share to those shareholders who bear the maximum rate of dividend withholding tax of 35 cents per share.
The net dividend per share for the respective categories of shareholders for the different dividend tax rates is as follows:
- 0% 175,00 cents per share
- 5% 166,25 cents per share
- 7,5% 161,875 cents per share
- 10% 157,50 cents per share
- 12,5% 153,125 cents per share
- 15% 148,75 cents per share
These different dividend tax rates are a result of the application of tax rates in various double-taxation agreements
as well as exemptions from dividend tax.
MTN Group Limited's tax reference number is 9692/942/71/8. In compliance with the requirements of Strate, the
electronic settlement and custody system used by the JSE Limited, the salient dates relating to the payment of the dividend are
as follows:
Declaration date Wednesday, 8 August 2018
Last day to trade cum dividend on the JSE Tuesday, 28 August 2018
First trading day ex dividend on the JSE Wednesday, 29 August 2018
Record date Friday, 31 August 2018
Payment date Monday, 3 September 2018
No share certificates may be dematerialised or rematerialised between Wednesday, 29 August 2018 and Friday, 31 August
2018, both days inclusive. On Monday, 3 September 2018 the dividend will be transferred electronically to the bank
accounts of certificated shareholders who make use of this facility.
In respect of those who do not use this facility, cheques dated Monday, 3 September 2018 will be posted on or about
this date. Shareholders who hold dematerialised shares will have their accounts held by the Central Securities Depository
Participant or broker credited on Monday, 3 September 2018.
For and on behalf of the board
PF Nhleko RA Shuter RT Mupita
Chairman Group president and CEO Group CFO
7 August 2018
Fairland
Results overview
Financial results for the six months ended 30 June 2018
Reviewed condensed consolidated interim financial statements for the six months ended 30 June 2018
The group's reviewed condensed consolidated interim financial statements for the six months ended 30 June 2018
have been independently reviewed by the group's external auditors. The group's reviewed condensed consolidated
interim financial statements have been prepared by the MTN finance staff under the guidance of the group finance
operations executive, S Perumal, CA(SA) and was supervised by the group chief financial officer, RT Mupita,
BScEng (Hons), MBA, GMP.
The results were made available on 8 August 2018.
Condensed consolidated income statement
for the
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Note Rm Rm Rm
Revenue 7 62 777 64 815 132 869
Other income 406 6 090 6 591
Direct network and technology operating costs (11 927) (12 460) (25 077)
Costs of handsets and other accessories (5 165) (5 088) (10 764)
Interconnect and roaming costs (5 216) (5 393) (10 974)
Staff costs (4 369) (4 420) (9 082)
Selling, distribution and marketing expenses (7 823) (8 365) (17 194)
Government and regulatory costs (2 085) (2 405) (5 150)
Other operating expenses (4 263) (7 993) (14 248)
EBITDA 22 335 24 781 46 971
Depreciation of property, plant and equipment (9 121) (9 595) (19 277)
Amortisation of intangible assets (2 233) (2 148) (4 490)
Impairment of goodwill (149) (2 631) (2 631)
Operating profit 10 832 10 407 20 573
Net finance costs 9 (3 677) (3 457) (9 267)
Loss on derecognition of long-term loan receivable - - (2 840)
Net monetary gain 100 67 264
Share of results of associates and joint
ventures after tax 10 197 579 840
Profit before tax 7 452 7 596 9 570
Income tax expense (2 541) (2 416) (5 020)
Profit after tax 4 911 5 180 4 550
Attributable to:
Equity holders of the company 4 381 5 460 4 416
Non-controlling interests 530 (280) 134
4 911 5 180 4 550
Basic earnings per share (cents) 11 244 304 246
Diluted earnings per share (cents) 11 240 297 241
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
Condensed consolidated statement of comprehensive income
for the
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Note Rm Rm Rm
Profit after tax 4 911 5 180 4 550
Other comprehensive income after tax
Items that may be reclassified to profit or loss
Net investment hedges 17 (1 718) 760 1 421
Foreign exchange movement on hedging instruments (2 386) 1 052 1 963
Deferred and current tax 668 (292) (542)
Available-for-sale financial assets2, 3 - 817 4 439
Gains arising during the period 12 - 817 4 439
Exchange differences on translating foreign
operations including the effect of hyperinflation2 5 235 (3 874) (12 417)
Gains/(losses) arising during the period 17 5 235 (3 874) (12 417)
Items that have been reclassified to profit or loss
Reclassification of foreign currency translation
differences on loss of significant influence2 - 3 298 3 298
Items that will not be reclassified to profit or loss
Equity investments at fair value through
other comprehensive income2, 3 (5 377) - -
Losses arising during the period 12 (5 377) - -
Other comprehensive income for the period (1 860) 1 001 (3 259)
Attributable to equity holders of the company (2 080) 998 (2 698)
Attributable to non-controlling interests 220 3 (561)
Total comprehensive income for the period 3 051 6 181 1 291
Attributable to:
Equity holders of the company 2 301 6 458 1 718
Non-controlling interests 750 (277) (427)
3 051 6 181 1 291
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
2 This component of other comprehensive income does not attract any tax.
3 The available-for-sale investment (2017) and equity investment at fair value through other comprehensive
income (2018) relate mainly to the group's investment in IHS Holding Limited (IHS) (note 12). Available-for-sale
financial assets have been reclassified to equity investments at fair value through other comprehensive income
in 2018 in terms of IFRS 9.
Condensed consolidated statement of financial position
as at
30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Note Rm Rm Rm
Non-current assets 187 002 187 717 183 502
Property, plant and equipment 95 505 90 652 91 786
Goodwill and intangible assets 39 896 40 305 38 330
Investments 12 25 193 25 714 27 686
Investment in associates and joint ventures 19 420 22 516 19 673
Deferred tax and other non-current assets 6 988 8 530 6 027
Current assets 60 324 70 651 60 780
Other current assets 14 173 14 783 11 389
Trade and other receivables 29 314 30 836 31 006
Restricted cash 3 406 1 681 2 376
Cash and cash equivalents 13 431 23 351 16 009
Non-current assets held for sale 19 3 288 - -
Total assets 250 614 258 368 244 282
Total equity 89 543 104 626 95 720
Attributable to equity holders of the company 87 887 102 553 94 188
Non-controlling interests 1 656 2 073 1 532
Non-current liabilities 88 522 82 628 83 482
Interest-bearing liabilities 14, 15 78 855 66 935 70 567
Deferred tax and other non-current liabilities 9 667 15 693 12 915
Current liabilities 71 162 71 114 65 080
Interest-bearing liabilities 14, 15 13 540 17 910 9 153
Trade and other payables 47 014 42 272 45 856
Other current and tax liabilities 10 608 10 932 10 071
Non-current liabilities held for sale 19 1 387 - -
Total equity and liabilities 250 614 258 368 244 282
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
Condensed consolidated statement of changes in equity
for the
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Note Rm Rm Rm
Opening balance at 1 January 94 188 102 380 102 380
Adjustment on initial application of IFRS 15 22 - 1 447 1 447
Adjustment on initial application of IFRS 9 22 (384) - -
Restated balance at 1 January 93 804 103 827 103 827
Total comprehensive income 2 301 6 458 1 718
Profit after tax 4 381 5 460 4 416
Other comprehensive income after tax (2 080) 998 (2 698)
Transactions with owners of the company
Share-based payment transactions - other 86 217 237
Cancellation of share-based payment transaction 18 (295) - -
Share-based payment transaction - MTN Zakhele Futhi - - 921
Dividends declared (8 098) (8 078) (12 572)
Other movements 89 129 57
Attributable to equity holders of the company 87 887 102 553 94 188
Non-controlling interests 1 656 2 073 1 532
Closing balance 89 543 104 626 95 720
Dividends declared during the period (cents per share) 450 450 700
Dividends declared after the period (cents per share) 175 250 450
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
Condensed consolidated statement of cash flows
for the
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Note Rm Rm Rm
Net cash generated from operating activities 13 189 19 194 33 387
Cash generated from operations 16 757 17 763 38 484
Finance income received 991 1 194 2 607
Finance cost paid (3 237) (2 919) (7 237)
Dividends received from associates and
joint ventures 10 1 495 6 952 7 129
Income tax paid (2 817) (3 796) (7 596)
Net cash used in investing activities (14 926) (14 696) (27 585)
Acquisition of property, plant and equipment (10 563) (11 331) (23 861)
Acquisition of intangible assets (1 986) (1 088) (2 800)
Increase in non-current investments (362) (158) (820)
(Purchase)/realisation of bonds, treasury
bills and foreign deposits (1 266) (1 274) 1 849
Increase in restricted cash (765) (746) (1 727)
Movement in other investing activities 16 (99) (226)
Net cash used in financing activities (1 776) (8 168) (14 612)
Proceeds from borrowings 15 14 695 11 106 23 287
Repayment of borrowings 15 (7 293) (10 873) (24 606)
Dividends paid to equity holders of the company (8 098) (8 069) (12 565)
Dividends paid to non-controlling interests (940) (406) (956)
Premium received on option issued to
MTN Zakhele Futhi - - 192
Other financing activities (140) 74 36
Net decrease in cash and cash equivalents (3 513) (3 670) (8 810)
Net cash and cash equivalents at
beginning of the period 15 937 27 375 27 375
Exchange gains/(losses) on cash and cash equivalents 1 123 (554) (2 664)
Net monetary gain on cash and cash equivalents 16 11 36
Cash classified as held for sale 19 (235) - -
Net cash and cash equivalents at end of the period 13 328 23 162 15 937
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements. In June 2017,
finance income received, finance cost paid (excluding the current period restatement) and income tax paid
was shown in a single line item - other operating activities.
Notes to the condensed consolidated interim financial statements for the six months ended 30 June 2018
1. Independent review
The directors of the company take full responsibility for the preparation of the condensed consolidated interim
financial statements. The condensed consolidated interim financial statements have been reviewed by our joint auditors
PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant Thornton Inc., who have expressed an unmodified conclusion
thereon. The joint external auditors have performed their review in accordance with International Standards on Review
Engagements (ISRE) 2410.
A copy of the independent auditors' review report on the condensed consolidated interim financial statements is
available for inspection at the company's registered office, together with the interim financial statements identified
in the independent auditors' review report.
The joint independent auditors' review report does not report on all of the information contained in this
announcement. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the joint
independent auditors' engagement they should obtain a copy of the independent auditors' review report together with
the accompanying interim financial statements from the company's registered office.
2. General information
MTN Group Limited (the company) carries on the business of investing in the telecommunications industry through its
subsidiary companies, joint ventures, associates and related investments.
3. Basis of preparation
The condensed consolidated interim financial statements for the six months ended 30 June 2018 are prepared in accordance
with International Financial Reporting Standard (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee (APC), Financial Pronouncements as issued by the Financial Reporting
Standards Council (FRSC), and the requirements of the Companies Act of South Africa.
The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements
for the year ended 31 December 2017, which have been prepared in accordance with International Financial Reporting Standards (IFRS).
4. Principal accounting policies
The group has adopted all the new, revised or amended accounting pronouncements as issued by the International Accounting
Standards Board (IASB) which were effective for the group from 1 January 2018. The following standards had an impact
on the group:
- IFRS 9 Financial Instruments (IFRS 9).
- IFRS 15 Revenue from Contracts with Customers (IFRS 15).
The accounting policies applied in the preparation of the condensed consolidated interim financial statements are in terms
of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual
financial statements except as previously stated above and except for a change in the presentation of cash flows. Refer to
note 22 for details.
5. Hyperinflation
The financial statements of the group entities whose functional currencies are the currencies of hyperinflationary
economies are adjusted in terms of the measuring unit current at the end of the reporting period.
The economy of Sudan was assessed to no longer be hyperinflationary, effective 1 July 2016, and hyperinflation accounting
was discontinued from this date onwards. As at 31 December 2017, the historical increase in the asset value as a result
of hyperinflation accounting had been fully impaired, which resulted in a R1 690 million decrease in EBITDA during
2017. During the six months ended 30 June 2018, R306 million of the impairment was reversed, resulting in an increase
in EBITDA. This amount represents the full impairment recognised during 2017, translated at a significantly weaker
exchange rate.
The economy of South Sudan was assessed to be hyperinflationary, effective 1 January 2016, and hyperinflation accounting
was applied for the year ended 31 December 2016. As at 31 December 2017 and 30 June 2018, the property, plant and
equipment of South Sudan was fully impaired, resulting in no hyperinflation adjustment on capital expenditure (CAPEX)
for the respective period.
In 2015, the Iranian economy was assessed to no longer be hyperinflationary and hyperinflation accounting was discontinued
effective 1 July 2015. The group's results from Iran include expenses resulting from the discontinuation of hyperinflation
accounting mainly relating to the subsequent depreciation of assets that were historically written up under hyperinflation
accounting. The additional income statement charge reduced equity-accounted earnings from Iran by R540 million for the six
months ended 30 June 2018 (June 2017: R640 million, December 2017: R1 328 million).
The economy of Syria was assessed to be hyperinflationary, effective 1 January 2014, and hyperinflation accounting has
been applied since. The group's proxy indicator for inflation in Syria remained stable during the period. Therefore,
a hyperinflation adjustment factor of one was applied during the period.
The impact of hyperinflation on the segment analysis is as follows:
Six months ended 30 June 2018
Reviewed
Rm
Revenue EBITDA CAPEX
Syria - - -
Sudan - 306 -
South Sudan (included in other SEAGHA) 65 1 (1)
65 307 (1)
Iran - major joint venture - - -
Six months ended 30 June 2017
Reviewed
Rm
Revenue EBITDA CAPEX
Syria 40 (1 110) 3
Sudan - (1 690) -
South Sudan (included in other SEAGHA) 31 (10) -
71 (2 810) 3
Iran - major joint venture - 69 -
Financial year ended 31 December 2017
Audited
Rm
Revenue EBITDA CAPEX
Syria 384 (1 227) 81
Sudan - (1 690) -
South Sudan (included in other SEAGHA) 120 (31) -
504 (2 948) 81
Iran - major joint venture - 69 -
6. Segment analysis
The group has identified reportable segments that are used by the group executive committee (chief operating decision
maker (CODM)) to make key operating decisions, allocate resources and assess performance. The reportable segments are
largely grouped according to their geographic locations and reporting lines to the CODM. The group's underlying operations
are clustered as follows:
- South Africa.
- Nigeria.
- South and East Africa and Ghana (SEAGHA).
- West and Central Africa (WECA).
- Middle East and North Africa (MENA).
June 2017 comparative numbers for the segments have been restated for changes to the group's segment presentation that
were made during the second half of 2017.
Operating results are reported and reviewed regularly by the CODM and include items directly attributable to a segment as
well as those that are attributed on a reasonable basis, whether from external transactions or from transactions with
other group segments.
The measure of reporting profit for each segment, that also represents the basis on which the CODM reviews segment results,
is EBITDA. EBITDA is defined as earnings before interest (which includes gains and losses on foreign exchange transactions),
tax, depreciation and amortisation, and is also presented before recognising the following items:
- Impairment of goodwill.
- Loss on derecognition of a long-term loan receivable.
- Net monetary gain resulting from the application of hyperinflation.
- Share of results of associates and joint ventures after tax.
For the purposes of the review of segment results by the CODM, EBITDA also excludes the following items:
- Hyperinflation (note 5).
- Tower sale profits.
- MTN Zakhele Futhi share-based payment expense.
- Exchange right profit on IHS investment.
These exclusions have remained unchanged from the prior year.
Irancell Telecommunication Company Services (PJSC) (Iran) proportionate results are included in the segment analysis as
reviewed by the CODM and excluded from IFRS reported results for revenue, EBITDA and CAPEX due to equity accounting for
joint ventures. The results of Iran in the segment analysis exclude the impact of hyperinflation accounting.
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Rm Rm Rm
REVENUE
South Africa 21 163 20 511 42 497
Nigeria 17 230 18 071 36 067
SEAGHA 10 342 9 495 20 187
Ghana 5 546 4 880 10 433
Uganda 2 440 2 506 5 193
Other SEAGHA 2 356 2 109 4 561
WECA 9 617 10 404 20 928
Ivory Coast 3 487 3 639 7 412
Cameroon 2 384 2 609 5 373
Other WECA 3 746 4 156 8 143
MENA 4 396 6 294 12 722
Syria 1 025 947 2 001
Sudan 829 2 272 4 540
Other MENA 2 542 3 075 6 181
Major joint venture - Iran 7 008 7 832 16 440
Head office companies and eliminations (36) (31) (36)
Hyperinflation impact 65 71 504
Iran revenue exclusion (7 008) (7 832) (16 440)
62 777 64 815 132 869
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Rm Rm Rm
EBITDA
South Africa 7 450 7 047 14 635
Nigeria 7 426 6 915 14 070
SEAGHA 3 610 3 016 6 908
Ghana 2 166 1 815 4 189
Uganda 854 830 1 794
Other SEAGHA 590 371 925
WECA 2 314 3 156 5 335
Ivory Coast 934 1 285 2 359
Cameroon 457 810 1 305
Other WECA 923 1 061 1 671
MENA 1 246 1 843 3 810
Syria 351 245 597
Sudan 255 750 1 592
Other MENA 640 848 1 621
Major joint venture - Iran 2 554 2 832 5 881
Head office companies and eliminations (30) (416) (449)
Hyperinflation impact 307 (2 810) (2 948)
Tower sale profits 12 13 27
Profit on exercise of exchange right of IHS - 6 017 6 017
MTN Zakhele Futhi share-based payment expense - - (434)
Iran EBITDA exclusion (2 554) (2 832) (5 881)
EBITDA 22 335 24 781 46 971
Depreciation, amortisation and
impairment of goodwill (11 503) (14 374) (26 398)
Net finance cost (3 677) (3 457) (9 267)
Loss on derecognition of long-term
loan receivable - - (2 840)
Net monetary gain 100 67 264
Share of results of associates and
joint ventures after tax 197 579 840
Profit before tax 7 452 7 596 9 570
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
Financial
Six months Six months year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed Audited
Rm Rm Rm
CAPITAL EXPENDITURE INCURRED
South Africa 3 907 3 473 11 470
Nigeria 2 320 2 749 8 953
SEAGHA 2 219 1 566 3 794
Ghana 1 260 912 2 196
Uganda 392 356 909
Other SEAGHA 567 298 689
WECA 2 351 1 707 3 696
Ivory Coast 562 499 1 203
Cameroon 101 694 976
Other WECA 1 688 514 1 517
MENA 572 734 2 294
Syria 102 85 951
Sudan 59 268 545
Other MENA 411 381 798
Major joint venture - Iran 1 622 3 850 9 274
Head office companies and eliminations 93 76 1 173
Hyperinflation impact (1) 3 81
Iran CAPEX exclusion (1 622) (3 850) (9 274)
11 461 10 308 31 461
7. Revenue
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Rm Rm Rm
Revenue from contracts with customers 62 589 64 635 132 509
Network services 44 790 46 295 94 952
Devices 4 081 4 070 8 829
Interconnect and roaming 5 742 6 163 12 396
Digital 6 305 6 517 13 137
Other 1 671 1 590 3 195
Interest revenue 188 180 360
Revenue 62 777 64 815 132 869
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
8. Nigeria regulatory fine
On 10 June 2016, MTN Nigeria Communications Limited (MTN Nigeria) resolved the matter relating to the previously imposed
regulatory fine with the Federal Government of Nigeria (FGN).
In terms of the settlement agreement reached on 10 June 2016, MTN Nigeria agreed to pay a total cash amount of N330 billion
over three years (the equivalent of R25,1 billion1) to the FGN as full and final settlement of the matter.
The regulatory fine was fully expensed in 2016. A discount unwind of R396 million (30 June 2017: R537 million,
31 December 2017: R1,0 billion) was recognised in finance costs during the current period relating to the outstanding
liability. The balance of the liability at 30 June 2018 amounts to R5,7 billion (30 June 2017: R7,2 billion,
31 December 2017: R6,6 billion) after taking into account the payment of N55 billion (R1,8 billion2) on 28 March 2018
and the unwinding of the interest.
1 Amount translated at the 10 June 2016 rate R1 = N13,15.
2 Amount translated at the 28 March 2018 rate R1 = N30,61.
9. Net finance costs
Financial
Six months Six months year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed Audited
Rm Rm Rm
Interest income on loans and receivables 412 1 240 2 109
Interest income on bank deposits 488 817 1 379
Finance income 900 2 057 3 488
Interest expense on financial liabilities
measured at amortised cost (3 977) (4 004) (8 400)
Net foreign exchange losses (600) (1 510) (4 355)
Finance costs (4 577) (5 514) (12 755)
Net finance costs recognised in profit or loss (3 677) (3 457) (9 267)
10. Share of results of associates and joint ventures after tax
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Rm Rm Rm
197 579 840
Irancell Telecommunication Company Services (PJSC) 455 651 930
Others (258) (72) (90)
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
For the six months ended 30 June 2018, outstanding dividends of R1 296 million (June 2017 and December 2017: dividends of
R6 509 million) was received from MTN Irancell.
During March 2018, International Digital Services Middle East Limited (iME) issued shares to a new investor. The group and
Irancell Telecommunication Company Services (PJSC) (MTN Irancell) each owned a 33,3% shareholding in iME prior to this transaction.
After the new investor was introduced, the group and MTN Irancell's shareholding decreased to 29,5% each. The group recognised
a R304 million gain on dilution, which is included in other income. The group's share of MTN Irancell's gain on dilution
(R134 million) is included in the share of results of associates and joint ventures after tax.
11. Earnings per ordinary share
Number of ordinary shares
Financial
Six months Six months year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed Audited
Number of ordinary shares in issue
At end of the period (excluding
MTN Zakhele Futhi and treasury shares) 1 797 642 541 1 797 451 094 1 797 451 094
Weighted average number of shares 1 797 562 154 1 797 377 182 1 797 414 442
Add: Dilutive shares
- Share options - MTN Zakhele Futhi 30 195 952 38 681 604 28 535 814
- Share schemes 1 547 709 898 793 3 064 710
Shares for dilutive earnings per share 1 829 305 815 1 836 957 579 1 829 014 966
Treasury shares
Treasury shares of 9 791 839 (June 2017: 9 983 286, December 2017: 9 983 286) are held by the group and 76 835 378
(June 2017: 76 835 378, December 2017: 76 835 378) are held by MTN Zakhele Futhi (RF) Limited (MTN Zakhele Futhi).
Headline earnings
Headline earnings is calculated in accordance with the circular titled "Headline Earnings" as issued by the South
African Institute of Chartered Accountants as amended from time to time and as required by the JSE Limited.
Financial
Six months year
Six months ended ended
ended 30 June 31 December
30 June 2017 2017
2018 Restated1 Restated1
Reviewed Reviewed Audited
Rm Rm Rm
Basic headline earnings per share
Reconciliation between profit attributable
to the equity holders of the company
and headline earnings
Profit attributable to equity holders
of the company 4 381 5 460 4 416
Net profit on disposal of property,
plant and equipment (11) (21) (11)
- Subsidiaries (IAS 16) (11) (20) (8)
- Joint ventures (IAS 28) - (1) (3)
Net profit on dilution of investment
in joint venture (IAS 28) (438) (28) (28)
- Subsidiaries (304) (28) (28)
- Joint ventures (134) - -
Net impairment (reversal)/loss on property,
plant, equipment and intangible assets
(IAS 36) (244) 2 786 3 045
Impairment of goodwill (IAS 36) 149 2 631 2 631
Realisation of deferred gain on disposal
of non-current assets held for sale (IFRS 5) (12) (13) (27)
Profit on derecognition of equity-accounted
investment (IAS 28) - (6 017) (6 017)
Total tax effects of adjustments - (157) (189)
Total non-controlling interest effect of
adjustments 42 (486) (541)
Basic headline earnings 3 867 4 155 3 279
Earnings per share (cents)
- Basic 244 304 246
- Basic headline 215 231 182
Diluted earnings per share (cents)
- Diluted 240 297 241
- Diluted headline 211 226 179
1 Restated for changes in accounting policies, refer to note 22 for details of the restatements.
12. Financial instruments
Financial instruments at amortised cost
The group has not disclosed the fair values of financial instruments measured at amortised cost except for the
borrowings set out below, as their carrying amounts closely approximate their fair values.
Listed long-term borrowings
The group has listed long-term fixed interest rate senior unsecured notes in issue which were issued in prior
years, with a carrying amount of R24 186 million at 30 June 2018 (30 June 2017: R23 117 million, 31 December 2017:
R21 765 million) and a fair value of R23 255 million (30 June 2017: R23 036 million, 31 December 2017: R22 434 million).
The fair values of these instruments are determined by reference to quoted prices on the Irish bond market. The market
for these bonds is not considered to be liquid and consequently the fair value measurement is categorised within
level 2 of the fair value hierarchy.
Financial instruments measured at fair value
The fair values of financial instruments measured at fair value are determined as follows:
Treasury bills
The fair value of these investments is determined by reference to published price quotations in an active market.
The group has classified treasury bills with a carrying amount of R370 million (30 June 2017: R293 million,
31 December 2017: R343 million) as at fair value through other comprehensive income (2017: available for sale)
and the group has classified treasury bills with a carrying amount of R717 million (30 June 2017: R697 million,
31 December 2017: R307 million) as at fair value through profit or loss. The fair value of these investments is
categorised within level 1 of the fair value hierarchy.
Fair value measurement of investment in IHS
Included in investments in the condensed consolidated statement of financial position is an equity investment in IHS
Group at fair value of R24 544 million at 30 June 2018 (30 June 2017: R24 859 million, 31 December 2017: R27 045 million).
The fair value was calculated using an earnings multiple technique and was based on unobservable market inputs
including tower industry earnings multiples of between 11 times to 16 times applied to MTN management's estimates
of earnings, less estimated net debt.
Given the confidentiality restrictions in the shareholders' agreement with IHS Group, MTN does not have access to the
IHS Group business plans or 2018 actual financial information. Any estimated earnings used to derive the existing fair
value are therefore solely based on MTN management assumptions and market estimates on financial growth, currency
movements, costs and performance. The investment has therefore been classified as level 3 of the fair value hierarchy
for the current reporting period. An increase of one in the low and high end of the multiple range, keeping other
inputs constant, would have resulted in an increase in the fair value of R2 244 million and a decrease of one in the
low and high end of the multiple range, keeping other inputs constant, would have resulted in a decrease in the fair
value by R2 244 million as at 30 June 2018. An increase of 10% in the estimated earnings used, keeping other inputs
constant, would have resulted in an increase in the fair value of R2 949 million and a decrease of 10% in the
estimated earnings used, keeping other inputs constant, would have resulted in a decrease in the fair value of
R2 949 million as at 30 June 2018.
A decrease of R5 469 million (June 2017: R817 million increase, December 2017: R4 249 million increase) has been
recognised for the period under review in other comprehensive income resulting from the change in fair value that
also included a liquidity discount.
Reconciliation of level 3 financial assets
The table below sets out the reconciliation of financial assets that are measured at fair value based on inputs that
are not based on observable market data (level 3):
Rm
Balance at 1 January 2017 380
Transfers from level 2 (IHS) 11 240
Acquisitions 132
Exchange right exercise (IHS) 13 767
Gain on available-for-sale investment 4 439
Foreign exchange differences (2 272)
Balance at 1 January 2018 27 686
Acquisitions 69
Revaluation of equity investment at fair value through other comprehensive income (5 377)
Foreign exchange differences 2 815
Balance at 30 June 2018 25 193
13. Authorised commitments for the acquisition of property, plant, equipment and software
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed Audited
Rm Rm Rm
16 286 20 924 27 747
- Contracted 11 770 12 046 6 958
- Not contracted 4 516 8 878 20 789
14. Interest-bearing liabilities
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed Audited
Rm Rm Rm
Bank overdrafts 103 189 72
Current borrowings 13 437 17 721 9 081
Current liabilities 13 540 17 910 9 153
Non-current borrowings 78 855 66 935 70 567
92 395 84 845 79 720
15. Issue and repayment of debt and equity securities
During the period under review the following entities raised and repaid significant debt instruments:
Financial
Six months Six months year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed Audited
Rm Rm Rm
Raised Repaid Raised Repaid Raised Repaid
MTN Holdings 7 450 2 157 7 007 5 996 16 007 16 865
Loan facilities 3 000 500 2 100 2 000 5 100 7 159
General banking facilities 2 700 1 350 4 150 3 250 5 650 6 825
Domestic medium-term programme 1 750 307 757 746 5 257 2 881
MTN International (Mauritius)
Limited (MTN Mauritius) 2 366 1 245 1 382 - 1 382 1 352
Revolving credit facility 2 366 1 245 1 382 - 1 382 1 352
MTN Nigeria Communications Limited 3 628 1 753 1 426 2 053 2 187 4 275
Long-term borrowings 3 628 1 753 1 426 2 053 2 187 4 275
Other 1 251 2 138 1 291 2 824 3 711 2 114
14 695 7 293 11 106 10 873 23 287 24 606
16. Contingent liabilities
Financial
Six months Six months year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Reviewed Reviewed1 Audited
Rm Rm Rm
Uncertain tax exposures 2 127 9 294 8 667
Legal and regulatory matters 1 589 656 1 180
3 716 9 950 9 847
1 The contingent liabilities previously reported at 30 June 2017 have been expanded to disclose contingent liabilities
relating to uncertain tax exposures and legal and regulatory matters separately.
Uncertain tax exposures
The group operates in numerous tax jurisdictions and the group's interpretation and application of the various tax rules
applied in direct and indirect tax filings may result in disputes between the group and the relevant tax authority.
The outcome of such disputes may not be favourable to the group. At year-end there were a number of tax disputes ongoing
in various of the group's operating entities, the most significant of which related to a transfer pricing dispute which
the group is contesting. At 30 June 2018, the contingency for the transfer pricing assessment has been significantly
reduced following the group's review of the tax authority's submissions made in the course of preparing for litigation.
Based on internal and external legal and technical advice obtained, the group remains confident that it has a strong
legal case to contest the remaining exposure.
Legal and regulatory matters
The group is involved in various legal and regulatory matters, the outcome of which may not be favourable to the group and
none of which are considered individually material.
The group has applied its judgement and has recognised liabilities based on whether additional amounts will be payable and
has included contingent liabilities where economic outflows are considered possible but not probable.
17. Exchange rates
Six Six Financial Six Six Financial
months months year months months year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2018 2017 2017 2018 2017 2017
Reviewed Reviewed Audited Reviewed Reviewed Audited
Closing rates Average rates
United States dollar USD 0,07 0,08 0,08 0,08 0,08 0,07
Nigerian naira NGN 26,25 24,92 29,05 29,32 23,91 24,61
Iranian rial IRR 3 089,10 2 491,24 2 893,16 3 187,14 2 460,84 2 493,01
Ghanaian cedi GHS 0,35 0,34 0,36 0,37 0,33 0,33
Cameroon Communaute
Financière Africaine franc XAF 41,19 44,38 44,44 45,06 45,55 44,06
Côte d'Ivoire Communaute
Financière Africaine franc CFA 40,84 44,29 45,50 44,51 45,63 43,92
Ugandan shilling UGX 281,94 275,23 293,68 300,99 270,40 270,09
Syrian pound SYP 31,84 39,67 35,18 35,53 38,87 37,76
Sudanese pound SDG 2,12 0,51 1,61 2,18 0,50 0,55
The group's functional and presentation currency is rand. The weakening of the closing rate of the rand against the
functional currencies of the group's largest operations contributed to the increase in consolidated assets and liabilities
and the resulting foreign currency translation reserve increase of R5 235 million (June 2017: R3 874 million reduction,
December 2017: R12 417 million reduction) for the period.
Net investment hedges
The group hedges a designated portion of its dollar net assets in MTN (Dubai) Limited (MTN Dubai) for FOREX exposure
arising between the USD and ZAR as part of the group's risk management objectives. The group designated external borrowings
(Eurobonds) denominated in USD held by MTN (Mauritius) Investments Limited with a value of R23,3 billion (June 2017:
R23 billion, December 2017: R22,4 billion) and external borrowings denominated in USD held by MTN Nigeria Communications
Limited with a value of R2,1 billion (June 2017: R3,5 billion, December 2017: R2,6 billion) as hedging instruments.
For the period of the hedge relationship, foreign exchange movements on these hedging instruments are recognised in other
comprehensive income as part of the foreign currency translation reserve (FCTR), offsetting the exchange differences
recognised in other comprehensive income, arising on translation of the designated dollar net assets of MTN Dubai to
ZAR. The cumulative FOREX movement recognised in other comprehensive income will only be reclassified to profit or loss
upon loss of control over MTN Dubai. There was no hedge ineffectiveness recognised in profit or loss during the current
or prior period.
18. Related party transactions
Transactions between members of the group
Scancom Limited (MTN Ghana) entered into operating lease agreements with Ghana Tower InterCo. B.V. in prior years. The operating
lease commitments amount to R11 042 million at 30 June 2018 (December 2017: R8 446 million). The expense recorded amounted to
R350 million for the six months ended 30 June 2018 (June 2017: R348 million, December 2017: R627 million). The rental amounts
escalate every year by inflation and the initial term is 10 years, followed by four times five-year renewal periods.
MTN Uganda Limited entered into operating lease agreements with Uganda Tower InterCo. B.V. in prior years. The operating lease
commitments amount to R1 581 million at 30 June 2018 (December 2017: R1 636 million). The expense recorded amounted to
R207 million for the six months ended 30 June 2018 (June 2017: R232 million, December 2017: R558 million). The rental
amounts escalate every year by inflation and the initial term is 10 years, followed by four times five-year renewal
periods.
Transaction with an entity associated with a director
On 29 June 2018, the group and Mainstreet 1561 Proprietary Limited, a wholly owned company of PF Nhleko, non-executive chairman
of MTN Group, agreed not to proceed with the sale of 14 750 000 MTN Zakhele Futhi shares. This is regarded as a cancellation
of a share-based payment transaction. The related receivable from Mainstreet 1561 Proprietary Limited was derecognised with
a corresponding debit in equity. There was no profit or loss impact arising from the cancellation.
19. Disposal group held for sale
In July 2018, the group entered into an agreement with Monaco Telecom S.A. (Monaco Telecom), in terms of which Monaco Telecom
will acquire 100% of the group's subsidiary, MTN Cyprus Limited (MTN Cyprus). This subsidiary forms part of the MENA segment.
Monaco Telecom will acquire MTN Cyprus for a net selling price of approximately EUR260 million (R4 174 million), adjusted for
changes in MTN Cyprus's working capital between signature date and closing date. The group expects the sale to close within
the third quarter of 2018. The estimated profit, based on net assets and exchange rates at 30 June 2018, after taking into
account estimated warranties and indemnities, directly attributable transaction costs and FCTR that will be reclassified to
profit or loss is approximately R2,1 billion.
As at 30 June 2018, the following assets and liabilities were included in the disposal group:
30 June 2018
Reviewed
Rm
Property, plant and equipment 1 034
Goodwill and intangible assets 1 161
Deferred tax and other non-current assets 174
Trade receivables and other current assets 684
Cash and cash equivalents 235
Interest-bearing liabilities (773)
Deferred tax and other non-current liabilities (138)
Current liabilities (476)
1 901
20. Benin frequency fees
MTN Benin and the government of Benin concluded a memorandum of understanding (MOU) in April 2018, which includes the
settlement of historic frequency fees, a five-year licence extension and the addition of optical fibre (FTTx) to the
existing licence conditions settled by the payment of CFA35 billion (R802 million1) in May 2018 and a second payment of
CFA35 billion (R857 million2) in December 2018. MTN Benin and the government of Benin reached an agreement regarding
ongoing frequency fees, which was subsequently confirmed by the issue of a decree specifying the frequency fees calculation.
The decree has confirmed the calculation methodology for allocating a portion of the CFA70 billion (R1,7 billion3) payment
to past frequency fees (CFA14,8 billion, R351 million3). The balance of the payment relating to the extended licence and
the right to deploy optical fibre (FTTx) was recognised as an intangible asset (CFA55,2 billion, R1,3 billion3).
1 Amounts are translated from CFA to ZAR using the closing exchange rate at 30 April 2018 of 43,6252.
2 Amounts are translated from CFA to ZAR using the closing exchange rate at 30 June 2018 of 40,8367.
3 Sum of translated amounts above.
21. Events after reporting period
Dividends declared
Dividends declared at the board meeting held on 7 August 2018 amounted to 175 cents per share.
Iran Sanctions
On 8 May 2018, the US announced its decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) agreement and to re-impose
economic sanctions against Iran. The first round of these sanctions became effective on 7 August 2018 and a second phase of sanctions is
expected to be effective on 5 November 2018. The sanctions may limit the ability of the group to repatriate cash from MTN Irancell,
including future dividends. As at 30 June 2018, Iranian rial-denominated dividends receivable and loans amounted to R3.4 billion.
The official exchange rate to the US dollar was 42 490 rials at 30 June 2018 and has remained largely unchanged since April 2018.
Sanctions may place pressure on the official exchange rate that is used to translate dividend and loan receivables as well as
the equity-accounted results of MTN Irancell.
22. Changes in accounting policies
The group has adopted the following new accounting pronouncements as issued by the IASB, which were effective for the group
from 1 January 2018:
- IFRS 15 Revenue from Contracts with Customers (IFRS 15).
- IFRS 9 Financial Instruments (IFRS 9).
The group also implemented a voluntary accounting policy change relating to a change in the presentation of cash flows.
The changes in accounting policies were applied retrospectively. Comparative numbers have been restated for the adoption of
IFRS 15 and the change in the presentation of cash flows.
Adoption of IFRS 15
The group principally generates revenue from providing mobile telecommunications services, such as network services
(comprising data, voice and SMS), digital services, interconnect and roaming services, as well as from the sale of mobile
devices. Products and services may be sold separately or in bundled packages. The typical length of a contract for postpaid
bundled packages is 24 months.
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaced
IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognised at an amount
that reflects the consideration to which an entity expects to be entitled for transferring goods or services to a customer.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on
behalf of third parties. The group recognises revenue when it transfers control over a product or services to a customer.
For bundled packages, the group accounts for individual products and services separately if they are distinct, i.e. if a
product or service is separately identifiable from other items in the bundled package and if a customer can benefit from
it. The consideration is allocated between separate products and services in a bundle based on their standalone selling
prices. The standalone selling prices are determined based on the list prices at which the group sells mobile devices
and network services separately.
On adoption of IFRS 15, the group restated its retained earnings as at 1 January 2017 as follows:
2017
Note Rm
Retained earnings - as previously reported 64 831
Earlier recognition of mobile device revenue 22.1.1 1 177
Earlier recognition of breakage 22.1.2 180
Capitalisation of subscriber acquisition costs 22.1.4 694
Increase in current and deferred tax liabilities (566)
Less: Non-controlling interest portion (38)
Adjustment to retained earnings on adoption of IFRS 15 1 447
Opening retained earnings 1 January - IFRS 15 66 278
The nature of the changes in the accounting policies were as follows:
Nature, timing of
satisfaction of performance
Type of product/ obligations, significant Nature of change in
service payment terms accounting policy Impact
22.1.1 Mobile The group recognises revenue when Earlier recognition This has resulted in an
devices the customer takes possession of of mobile device increase of the transaction
the device. For mobile devices revenue price in postpaid contracts
sold separately, customers pay The group previously and an increase in revenue
in full at the point of sale. anticipated early contract allocated to devices.
For mobile devices sold in upgrades and based
bundled packages, customers the subscriber contract As device revenue has
usually pay monthly in equal period on the expected increased and is recognised
instalments over a period term and accounted for any upfront, this has resulted
of 24 months. consideration received in a larger contract asset
beyond the anticipated balance that is impaired
upgrade period as network when customers default
services revenue as it was on payments on their postpaid
earned (mainly in its South contract, i.e. an increase
African operation). in impairment of trade
receivables and contract
Following the adoption of assets.
IFRS 15, the group bases the
subscriber contract period
on the contractual term and
accounts for early upgrades
as contract modifications.
The effect of the modification
is that the contract asset at
modification date is treated
as a payment to a customer and
results in a reduction of the
revenue from the subsequent
contract.
The group assesses postpaid The group recognises This has resulted in lower
contracts including handsets interest revenue and revenue recognised upfront
to determine if they contain a reduction in device on the devices and the
a significant financing revenue on transactions recognition of interest
component. The group has with a significant revenue over the contract
elected to apply the practical financing component where period.
expedient that allows the the period between the
group not to adjust the transfer of handsets
transaction price for the and the subscriber
significant financing payment period exceeds
components for contracts 12 months.
where the time difference
between customer payment and
transfer of goods or services
is expected to be one year or
less. The group recognises
significant financing
components as interest revenue
over the period between
satisfying the related
performance obligation
and payment.
22.1.2 Mobile Mobile telecommunication Earlier recognition of This has resulted in revenue
telecom- services include network breakage from breakage being recognised
muni services and digital services. Previously, the group earlier - this has resulted
cation The group recognises revenue only accounted for in an increase in revenue
services from these services as they breakage when it became and a decrease in unearned
are provided. remote that customers revenue (which is now
would use these services. named contract liabilities).
When the group expects to be
entitled to breakage
(forfeiture of unused value
or network services), the
group recognises the expected
amount of breakage in proportion
to network services provided
versus the total expected
network services to be
provided. Any unexpected
amounts of breakage are
recognised when the unused
value or network services
expire or when usage thereof
becomes remote.
22.1.3 Inter- Interconnect/roaming revenue The historical pattern of This change has resulted in
connect and debtors are recognised as late payments (i.e. customary a reduction of interconnect
and the service is provided, business practice) should and roaming revenue and an
roaming unless it is not probable be taken into account in increase in interest revenue
on transaction date that measuring interconnect over the expected payment
the interconnect revenue and roaming revenue. period. As this change mainly
will be received, in which affects an equity-accounted
case interconnect revenue operation, it has resulted
is recognised only when the in a decrease in the share
cash is received or where a of results of associates and
right of set-off exists with joint ventures after tax in 2017
interconnect parties in with no change to retained
settling amounts. earnings at 1 January 2017.
Some interconnect and roaming
debtors have a historical
pattern of late payment due
to sanctions imposed. The
group has continued to
provide services to these
debtors (due to regulatory
requirements) where the
recovery of principal is
significantly delayed beyond
the contractual terms. The
group has considered this
historical payment pattern
in assessing whether the
contract contains a
significant financing
component.
22.1.4 Capitalisation of subscriber acquisition costs
IFRS 15 introduced specific guidance on accounting for incremental costs of obtaining contracts with customers.
Under IAS 18, the group expensed subscriber acquisition costs at inception of the contract.
The group expects that incremental subscriber acquisition costs for obtaining and renewing contracts are
recoverable. These costs include agent's commission on postpaid contracts and SIM activation costs on prepaid
contracts. The group has therefore capitalised these costs as contract costs. Capitalised contract costs are
amortised on a systematic basis over the average customer life and included in selling, distribution and
marketing expenses in profit or loss.
In terms of a practical expedient, the group has elected to recognise the incremental costs of obtaining
contracts as a selling, distribution and marketing expense in profit or loss, when incurred, if the
amortisation period of the assets that the group otherwise would have recognised is 12 months or less.
The impact of this change is a decrease in selling, distribution and marketing expenses and the recognition
of a new asset: capitalised contract costs.
22.1.5 Transition to IFRS 15
In accordance with the transition provisions in IFRS 15, the group has adopted the new rules retrospectively
and has restated comparative numbers for the 2017 financial year. The group applied the following practical
expedients when applying IFRS 15 retrospectively:
- The group did not restate comparative numbers for contracts that were completed contracts at 1 January 2017.
- The group did not restate comparative numbers for contracts that began and ended in the same annual reporting period.
- For modified contracts, the group used the contractual terms that existed at 1 January 2017.
22.2 Adoption of IFRS 9
The adoption of IFRS 9 had the following impact on the group:
- Change from the IAS 39 incurred loss model to the expected credit loss (ECL) model to calculate impairments of
financial instruments.
- Change in classification of the measurement categories for financial instruments.
More detail on the impact from the adoption of IFRS 9 is provided on the following pages.
22.2.1 Impairment
Before the adoption of IFRS 9, the group calculated the allowance for credit losses using the incurred loss model.
Under the incurred loss model, the group assessed whether there was any objective evidence of impairment at the
end of each reporting period. If such evidence existed the allowance for credit losses in respect of financial
assets at amortised cost was calculated as the difference between the asset's carrying amount and its recoverable
amount, being its present value of the estimated future cash flows discounted at the original effective interest
rate (EIR).
Under IFRS 9 the group calculates allowance for credit losses as ECLs for financial assets measured at amortised
cost, debt investments at fair value through other comprehensive income (FVOCI) and contract assets. ECLs are a
probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and
the cash flows that the group expects to receive). ECLs are discounted at the original EIR of the financial
asset.
The group applies the simplified approach to determine the ECL for trade receivables and contract assets.
This results in calculating lifetime expected credit losses for these trade receivables. ECL for trade
receivables is calculated using a provision matrix. For contract assets and mobile trade receivables, ECLs
are determined using a simplified parameter-based approach.
Provision matrix - ECLs are calculated by applying a loss ratio to the aged balance of trade receivables
at each reporting date. The loss ratio is calculated according to the ageing/payment profile of sales
by applying historic/proxy write-offs to the payment profile of the sales population. In instances where
there was no evidence of historical write-offs, management used a proxy write-off. Trade receivable
balances have been grouped so that the ECL calculation is performed on groups of receivables with
similar risk characteristics and ability to pay. Similarly, the sales population selected to determine
the ageing/payment profile of the sales is representative of the entire population and in line with
future payment expectations. The historic loss ratio is then adjusted for forward looking information
to determine the ECL for the portfolio of trade receivables at the reporting period to the extent that
there is a strong correlation between the forward looking information and the ECL.
Simplified parameter-based approach - ECL is calculated using a formula incorporating the following
parameters: exposure at default (EAD), probability of default (PD), loss given default (LGD) and the
effective interest rate (EIR) (i.e. PD x LGD x EAD = ECL). Exposures are mainly segmented by customer
type, i.e. corporate, consumer, etc., ageing, device versus SIM only contracts and months in contract.
This is done to allow for risk differentiation. The probability of a customer defaulting as well as the
realised loss with defaulted accounts have been determined using historical data (12 months and 36 months
respectively). The EIR represents a weighted average rate incorporating a risk-free rate plus a risk premium.
22.2.2 Classification, initial recognition and subsequent measurement
IFRS 9 introduces new measurement categories for financial assets. The measurement categories of IFRS 9 and
IAS 39 are illustrated in the table below. From 1 January 2018 the group classifies financial assets in each
of the IFRS 9 measurement categories based on the group's business model for managing the financial asset and
the cash flow characteristics of the financial asset.
IAS 39 category IFRS 9 category
Financial assets at fair value through profit or loss (FVTPL) Financial assets at FVTPL
Loans and receivables Financial assets at amortised cost
Available for sale Investments at fair value through other
comprehensive income (FVOCI)*
Held to maturity
* This includes both debt and equity instruments. The biggest change is that on derecognition of equity instruments
gains and losses accumulated in OCI are not reclassified to profit or loss.
The reclassification into the new measurement categories of IFRS 9 did not have a significant impact on the group.
The group has designated the investment in IHS and other unlisted equity investments as at FVOCI, as these instruments
are not held for trading. Additionally, some of the group's treasury bills are held with a business model to
collect and sell and consequently have been classified as FVOCI debt instruments.
Financial liabilities are measured at amortised cost except for those designated as at FVTPL, which are measured
at fair value.
22.2.3 Transition to IFRS 9
Changes in accounting policies from the adoption of IFRS 9 have been applied retrospectively; however, the group
has elected not to restate comparative information. Differences between the carrying amounts as at 31 December 2017
and 1 January 2018 resulting from the initial application of IFRS 9 are recognised in retained earnings. Accordingly,
information relating to 30 June 2017 and 31 December 2017 does not reflect the requirements of IFRS 9 but rather
those of IAS 39.
The group has elected an accounting policy choice not to adopt the hedge accounting requirements of IFRS 9, but
to continue applying the hedge accounting requirements of IAS 39.
22.3 Presentation of cash flows
During 2018, the group reviewed the classification of cash flows and aligned the external presentation of cash flows
with the internal presentation applied to manage the business and used for performance management. The group voluntarily
changed its accounting policy and reclassified:
- Dividends paid to equity holders of the company and non-controlling interests from cash flows from operating activities
to cash flows from financing activities.
- Interest paid in the group's head office treasury function from cash flows from financing activities to cash flows
from operating activities.
Comparative numbers have been restated accordingly.
22.4 Impact on the financial statements
The following tables show the restatements recognised for each individual line item. Line items that were not affected
by the changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the
numbers provided. The adjustments are explained in more detail by standard below.
Six months ended 30 June 2017 Year ended 31 December 2017
As As
previously previously
reported IFRS 15 Restated reported IFRS 15 Restated
Income statement (extract) Note Rm Rm Rm Rm Rm Rm
Revenue 22.1.1, 64 386 429 64 815 132 815 54 132 869
22.1.2
Selling, distribution and
marketing expenses 22.1.4 (8 399) 34 (8 365) (17 276) 82 (17 194)
Other operating expenses 22.1.1 (7 912) (81) (7 993) (14 128) (120) (14 248)
EBITDA 24 399 382 24 781 46 955 16 46 971
Operating profit 10 025 382 10 407 20 557 16 20 573
Share of results of
joint ventures
and associates after tax 22.1.3, 602 (23) 579 841 (1) 840
22.1.4
Profit before tax 7 237 359 7 596 9 555 15 9 570
Income tax expense (2 312) (104) (2 416) (5 014) (6) (5 020)
Profit after tax 4 925 255 5 180 4 541 9 4 550
Attributable to:
Equity holders of
the company 5 207 253 5 460 4 414 2 4 416
Non-controlling
interests (282) 2 (280) 127 7 134
Basic earnings per
share (cents) 290 14 304 246 - 246
Diluted earnings
per share (cents) 283 14 297 241 - 241
Six months ended 30 June 2017 Year ended 31 December 2017
As As
previously previously
reported IFRS 15 Restated reported IFRS 15 Restated
Statement of comprehensive income (extract) Rm Rm Rm Rm Rm Rm
Items that may be subsequently reclassified
to profit or loss
Exchange differences on translating foreign
operations including the effect
of hyperinflation (3 866) (8) (3 874) (12 376) (41) (12 417)
Other comprehensive income for the period 1 009 (8) 1 001 (3 218) (41) (3 259)
Attributable to equity holders
of the company 1 004 (6) 998 (2 664) (34) (2 698)
Attributable to non-controlling interests 5 (2) 3 (554) (7) (561)
Total comprehensive income 5 934 247 6 181 1 323 (32) 1 291
Attributable to:
Equity holders of the company 6 211 247 6 458 1 750 (32) 1 718
Non-controlling interests (277) - (277) (427) - (427)
30 June 31 December
2017 2017 31 December 1 January
As 30 June As 2017 2018
previously 2017 previously Restated IFRS 9 Restated
Statement of financial reported IFRS 15 Restated reported IFRS 15 Rm Rm Rm
position (extract) Note Rm Rm Rm Rm Rm
Non-current assets
Investments in associates
and joint ventures 22.1.3, 22 465 51 22 516 19 610 63 19 673 (100) 19 573
22.1.4
Deferred tax and other
non-current assets 7 501 (450) 7 051 5 103 (612) 4 491 - 4 491
Contract assets -
non-current1 22.1.1 - 858 858 - 828 828 (282) 546
Capitalised contract costs1 22.1.4 - 621 621 - 708 708 - 708
Current assets
Trade and other receivables
and other current assets 22.1.1 44 310 1 309 45 619 41 515 880 42 395 (79) 42 316
Total assets 255 979 2 389 258 368 242 415 1 867 244 282 (461) 243 821
Total equity
Attributable to equity
holders of the company 100 859 1 694 102 553 92 773 1 415 94 188 (384) 93 804
Non-controlling interests 2 035 38 2 073 1 494 38 1 532 - 1 532
Non-current liabilities
Deferred tax and other
non-current liabilities 15 119 574 15 693 12 465 450 12 915 (77) 12 838
Current liabilities
Trade and other payables 22.1.2 42 180 92 42 272 45 718 138 45 856 - 45 856
Other current and tax
liabilities 10 941 (9) 10 932 10 245 (174) 10 071 - 10 071
Total equity and liabilities 255 979 2 389 258 368 242 415 1 867 244 282 (461) 243 821
1 These line items are included in the'Deferred tax and other non-current assets' line item in the statement of financial position.
22.4 Impact on the financial statements continued
Six months ended 30 June 2017 Year ended 31 December 2017
As Change in As Change in
previously accounting previously accounting
reported policy Restated reported policy Restated
Statement of cash flows (extract) Note Rm Rm Rm Rm Rm Rm
Net cash generated from
operating activities 22.3 12 069 7 125 19 194 23 694 9 693 33 387
Dividends paid to equity
holders of the company 22.3 (8 069) 8 069 - (12 565) 12 565 -
Dividends paid to non-controlling
interests 22.3 (406) 406 - (956) 956 -
Finance cost paid 22.3 (1 569) (1 350) (2 919) (3 409) (3 828) (7 237)
Net cash used in financing activities (1 043) (7 125) (8 168) (4 919) (9 693) (14 612)
Repayment of borrowings 22.3 (12 223) 1 350 (10 873) (28 434) 3 828 (24 606)
Dividends paid to equity
holders of the company 22.3 - (8 069) (8 069) - (12 565) (12 565)
Dividends paid to non-controlling
interests 22.3 - (406) (406) - (956) (956)
Appendix
MTN Nigeria
Selected condensed consolidated interim financial information for the six months ended 30 June 2018
The joint independent auditors' review report does not report on all of the information contained in this
announcement/financial results. Shareholders are therefore advised that in order to obtain a full understanding
of the nature of the joint auditors' engagement they should obtain a copy of the auditors' report together with
the accompanying financial information from the issuer's registered office.
The information below has not been audited or reviewed.
Condensed consolidated statement of profit or loss
for the period ended 30 June 2018
Six months
Six months period ended
period ended 30 June
30 June 2017
2018 Restated1
N’000 N’000
Revenue 505 667 542 432 280 510
Direct network operating costs (149 443 206) (134 249 419)
Value added services (10 286 929) (15 806 446)
Blackberry licence fees - (629 599)
Cost of handsets and other accessories (3 561 616) (2 024 838)
Interconnect costs (46 769 707) (41 833 405)
Roaming costs (2 540 789) (1 377 924)
Transmission costs (2 736 912) (2 959 008)
Employee benefits (12 420 885) (11 384 949)
Discounts and commissions (25 023 121) (23 152 634)
Advertisements, sponsorships and sales promotions (7 953 600) (7 277 271)
(Impairment)/reversal of impairment of property, (758 926) 718 535
plant and equipment
Writeback of impairment of assets held for sale 6 996 -
Other operating expenses (26 307 956) (26 916 845)
Depreciation (68 341 298) (60 038 983)
Amortisation of intangible assets (13 028 580) (13 194 723)
Operating profit 136 501 013 92 153 001
Finance income 12 366 468 27 141 014
Finance costs (40 512 561) (63 844 899)
Profit before tax 108 354 920 55 449 116
Income tax expense (34 959 533) (14 813 189)
Profit for the period 73 395 387 40 635 927
Attributable to:
Owners of the parent 73 395 387 40 635 927
73 395 387 40 635 927
Earnings per share - basic/diluted N180,29 N99,82
1 2017 comparatives are restated for the adoption of IFRS 15.
Condensed consolidated statement of comprehensive income
for the
Six months
Six months period ended
period ended 30 June
30 June 2017
2018 Restated1
N'000 N’000
Profit for the period 73 395 387 40 635 927
Items that may be reclassified to profit or loss (155 340) (84 592)
- Changes in the fair value of financial assets at
fair value through other comprehensive income
Total comprehensive income for the period 73 240 047 40 551 335
Attributable to:
Owners of the parent 73 240 047 40 551 335
73 240 047 40 551 335
1 2017 comparatives are restated for the adoption of IFRS 15.
Condensed consolidated statement of financial position
as at
31 December
30 June 2017
2018 Restated1
N'000 N'000
ASSETS
Non-current assets
Property, plant and equipment 576 034 822 582 438 885
Intangible assets 119 628 059 128 602 009
Contract acquisition cost 1 587 353 1 264 979
Non-current prepayments 15 891 761 13 683 216
Deferred tax assets 28 847 988 25 653 339
Derivative asset - 55 673
741 989 983 751 698 101
Current assets
Assets held for sale - 174
Inventories 2 508 077 5 729 904
Trade and other receivables 30 451 175 33 425 336
Contract acquisition cost 1 898 515 2 146 589
Current investments 117 463 992 71 078 495
Restricted cash 48 832 260 41 617 634
Cash and cash equivalents 59 594 541 89 564 964
260 748 560 243 563 096
Total assets 1 002 738 543 995 261 197
1 2017 comparatives are restated for the adoption of IFRS 15.
31 December
30 June 2017
2018 Restated1
N'000 N'000
EQUITY
Share capital 646 510 646 510
Share premium 64 498 466 64 498 466
Retained profit 81 867 119 47 166 661
Other reserves 341 309 496 649
147 353 404 112 808 286
LIABILITIES
Non-current liabilities
Borrowings 138 077 134 135 544 915
Share based payment liability 654 791 655 565
Regulatory fine liability - 91 656 623
Provisions 64 440 70 048
Deferred tax liabilities 111 809 040 112 829 898
Derivative liability 57 729 -
250 663 134 340 757 049
Current liabilities
Trade and other payables 181 511 069 246 076 909
Contract liabilities 36 743 841 35 532 093
Regulatory fine liability 149 434 211 101 119 141
Provisions 15 491 879 13 192 909
Current tax liabilities 49 286 235 25 954 582
Borrowings 172 254 770 119 820 228
604 722 005 541 695 862
Total liabilities 855 385 139 882 452 911
Total equity and liabilities 1 002 738 543 995 261 197
1 2017 comparatives are restated for the adoption of IFRS 15.
Condensed consolidated statement of changes in equity
for the
Attributable to owners of the parent
Share Share Other
capital premium retained
N'000 N'000 earnings
N'000 N'000
Balance at 31 December 2016 as originally presented 646 510 64 498 466 7 606 567
IFRS 15 retrospective adjustments - - 3 441 689
Restated total equity at the beginning of the year
1 January 2017 646 510 64 498 466 11 048 256
Profit for the six months period (restated) - - 40 635 927
Other comprehensive loss - - -
Balance at 30 June 2017 (restated) 646 510 64 498 466 51 684 183
Balance at 31 December 2017 as originally presented 646 510 64 498 466 38 115 931
IFRS 15 retrospective restatements - - 3 958 909
Restated total equity as at 31 December 2017 646 510 64 498 466 42 074 840
IFRS 9 adjustments - - (82 348)
Restated total equity as at 1 January 2018 646 510 64 498 466 41 992 492
Profit for the six months period - - 73 395 387
Other comprehensive loss - - -
Dividend declared - - (38 612 581)
Balance at 30 June 2018 646 510 64 498 466 76 775 298
1 2017 comparatives are restated for the adoption of IFRS 15.
Condensed consolidated statement of changes in equity
for the
Attributable to owners of the parent
Pioneer Total Total
retained retained Other shareholders’ Total
earnings profit/(loss) reserves1 fund equity
N‘000 N‘000 N‘000 N‘000 N‘000
Balance at 31 December 2016 as originally presented 5 091 821 12 698 388 325 721 78 169 085 78 169 085
IFRS 15 retrospective adjustments - 3 441 689 - 3 441 689 3 441 689
Restated total equity at the beginning of the year
1 January 2017 5 091 821 16 140 077 325 721 81 610 774 81 610 774
Profit for the six months period (restated) - 40 635 927 - 40 635 927 40 635 927
Other comprehensive loss - - (84 592) (84 592) (84 592)
Balance at 30 June 2017 (restated) 5 091 821 56 776 004 241 129 122 162 109 122 162 109
Balance at 31 December 2017 as originally presented 5 091 821 43 207 752 496 649 108 849 377 108 849 377
IFRS 15 retrospective restatements - 3 958 909 - 3 958 909 3 958 909
Restated total equity as at 31 December 2017 5 091 821 47 166 661 496 649 112 808 286 112 808 286
IFRS 9 adjustments - (82 348) - (82 348) (82 348)
Restated total equity as at 1 January 2018 5 091 821 47 084 313 496 649 112 725 938 112 725 938
Profit for the six months period - 73 395 387 - 73 395 387 73 395 387
Other comprehensive loss - - (155 340) (155 340) (155 340)
Dividend declared - (38 612 581) - (38 612 581) (38 612 581)
Balance at 30 June 2018 5 091 821 81 867 119 341 309 147 353 404 147 353 404
1 2017 comparatives are restated for the adoption of IFRS 15.
Condensed statement of cash flows
for the six months period ended 30 June 2018
Six months Six months
period ended period ended
30 June 30 June
2018 2017
N’000 Restated1
N’000
Cash flows from operating activities:
Cash generated from operations 193 378 154 156 099 162
Payment of contract acquisition cost (322 374) -
Share based payment (775) -
Interest received 14 183 461 15 804 545
Interest paid (20 608 079) (22 888 414)
Dividends paid (38 612 581) -
Regulatory fine paid (55 000 000) (30 000 000)
Tax paid (11 980 520) (21 823 593)
Net cash generated from operating activities 81 037 286 97 191 700
Cash flows from investing activities:
Proceeds from the disposal of assets held for sale - 8 599
Acquisition of property, plant and equipment (104 109 441) (83 783 232)
Proceeds from disposal of property, plant and equipment 328 684 396 934
Acquisition of intangible assets (2 298 427) (3 398 021)
Purchase of treasury bills and foreign currency fixed deposits (52 236 974) (29 786 623)
Increase in restricted cash (7 214 626) (15 056 070)
Net cash used in investing activities (165 530 784) (131 618 413)
Cash flows from financing activities:
Proceeds from borrowings 105 546 176 30 887 172
Repayment of borrowings (52 298 404) (49 664 493)
Net cash generated from/(used in) financing activities 53 247 772 (18 777 321)
Net decrease in cash and cash equivalents (31 245 726) (53 204 034)
Cash and cash equivalents at beginning of the period 89 564 964 146 369 032
Effect of changes in exchange rates on cash and cash equivalents 1 275 303 (769 521)
Cash and cash equivalents at end of the period 59 594 541 92 395 477
1 2017 comparatives are restated for the adoption of IFRS 15.
Administration
Board of directors
PF Nhleko2
PB Hanratty$3
A Harper#3
MH Jonas3, 4
KP Kalyan3
S Kheradpir††3
NP Mageza3
MLD Marole3
AT Mikati†2
SP Miller^3
KDK Mokhele3, 5
RT Mupita1
KC Ramon3
RA Shuter#1
NL Sowazi3
BS Tshabalala3, 4
J van Rooyen3
†† American
† Lebanese
# British
$ Irish
^ Belgian
1 Executive
2 Non-executive
3 Independent non-executive
4 Appointed 1 June 2018
5 Appointed 1 July 2018
Group secretary
SB Mtshali
Private Bag X9955, Cresta, 2118
Registered office
216 - 14th Avenue, Fairland, 2195
American depository receipt (ADR) programme
Cusip No. 62474M108 ADR to ordinary Share 1:1
Depository
The Bank of New York
101 Barclay Street, New York NY, 10286, USA
MTN Group sharecare line
Toll free: 0800 202 360 or +27 11 870 8206
if phoning from outside South Africa
Office of the transfer secretaries
Computershare Investor Services Proprietary Limited
Registration number 2004/003647/07
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107
Joint auditors
PricewaterhouseCoopers Inc.
4 Lisbon Lane, Waterfall City,
Jukskei view, 2090
SizweNtsalubaGobodo Grant Thornton Inc.
20 Morris Street East,
Woodmead, 2191
PO Box 2939, Saxonwold, 2132
Sponsor
Deutsche Securities (SA) Proprietary Limited
3 Exchange Square, 87 Maude Street, Sandton, 2196
Attorneys
Webber Wentzel
90 Rivonia Road, Sandton, 2196
PO Box 61771, Marshalltown, 2107
Contact details
Telephone: National 083 912 3000 and
083 869 3000
International +27 83 912 3000
Facsimile: National 011 912 4093
International +27 11 912 4093
E-mail: investor_relations@mtn.co.za
Website: http://www.mtn.com
Date: 08/08/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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