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Our executive chairman’s report
continued
gained ground on competitors. Group NPS rose
from 24% in December 2015 to 35% in December
2016, underpinned by improvements in network
quality, value offerings and brand image.
The Group reported a number of material once-off
costs, which negatively impacted Group EBITDA.
These costs include the Nigerian regulatory fine
of R10 499 million**; professional fees related to
the settlement of the Nigerian regulatory fine of
R1 324 million**; MTN Zakhele Futhi share-based
payment expense of R1 008million**; the impairment
of property, plant and equipment in South Sudan of
R295 million (R2 679 million*) and Project Winback,
relating to the reconnection of subscribers in Nigeria
of R530 million**. As a result of these once-off costs,
EBITDA declined by 31,1%** to R40 751 million**.
Excluding the impact of hyperinflation and the
attributable goodwill impairment, tower profits, the
Nigerian regulatory fine and the MTN Zakhele
Futhi share-based payment expense, EBITDA
declined 13,2%.
Reported basic headline earnings per share (HEPS)
declined by 110%** to a loss of 77 cents**. This was
significantly impacted by the Nigerian regulatory
fine, which had a 500 cents negative impact on
HEPS. 455 cents was non-recurring and 45 cents
related to the interest unwind of the fine. In addition,
HEPS was negatively impacted by:
•
Foreign exchange losses of 329 cents;
•
Losses from MTN’s 51% equity interest in Nigeria
Tower InterCo B.V. of 122 cents mainly as a result
of unrealised foreign exchange losses on US
dollar-denominated loans (non-recurring from
1 February 2017 when MTN exchanged its 51%
interest in Nigeria Tower InterCo B.V. for an
increased stake in IHS Holdings Limited, now at
approximately 29%);
•
The MTN Zakhele Futhi impact of 88 cents;
•
Professional fees related to the settlement of the
Nigerian regulatory fine of 73 cents (non-
recurring);
•
Losses from our investments in Digital Group,
mainly including Africa Internet Holdings (AIH),
Middle East Internet Holdings (MEIH) and Iran
Internet Group (IIG) of 39 cents; and
•
Hyperinflation of 37 cents.
During the year, we focused on restoring the strength
of the Group’s balance sheet, with our capital
structure receiving considerable attention.
In the year we repatriatedR6 308million (€425million)
from MTN Irancell, being the entire amount due
under the loan advanced for the licence fee in 2005.
Subsequent to year end, the operational dividends
of the last five years presently due to MTN were
paid by MTN Irancell, totalling €468 million. This
brings the total repatriation to €893 million. In 2015,
MTN converted a portion of the dividends due to an
interest-bearing loan of €135 million (at the 2016
year end closing exchange rate). This loan is due for
settlement on 30 September 2017. This will
substantially close thematter on the long outstanding
payments due from MTN Irancell.
To meet ongoing capital expenditure and working
capital requirements, we successfully refinanced
maturing facilities and secured additional long-term
financing facilities from local and international
sources. This included issuing a US$1 billion bond.
These initiatives diversified MTN’s sources of
funding, improved our debt maturity profile and
gave us access to sufficient liquidity to respond
swiftly to the ongoing needs of the business.
The board declared a second half dividend of
450 cents per share, bringing to 700 cents the total
dividend for the year, down from 1 310 cents for
2015.
Phuthuma Nhleko,
Group executive chairman
MTN Group Limited
Integrated Report 2016
24