MTN Group Limited Integrated Report 2016

45 / 96

Share of results of joint ventures and
associates after tax
Joint ventures and associates reported a loss of
R127 million** compared to a gain of R1 226 million**
in the previous year. This included a charge of
R1 853 million incurred by our operation in Iran
mainly relating to the subsequent depreciation and
amortisation of the previously hyperinflated assets
that were historically written up under hyperinflation
accounting. Losses of R2 227 million from MTN’s
51% interest in Nigerian Tower InterCo B.V. were
mainly a result of the foreign exchange unrealised
losses (R2 254 million) incurred on US dollar-
denominated loans. Short-term losses from Digital
Group, mainly AIH, MEIH and IIG, of R706 million
also contributed to the overall loss.
Taxation
The effective tax rate increased to 42,4% from 32,6%
in the previous year, impacted by lower profit before
tax (PBT) along with the effects of:
• the disallowance of deferred tax credits on
assessed losses in MTN South Sudan and MTN
Guinea-Conakry;
• unproductive interest in MTN Holdings and MTN
Mauritius;
• Education tax in MTN Nigeria;
• additional taxes in MTN Ghana, MTN Syria and
MTN Yemen;
• goodwill impairments in MTN Guinea-Conakry,
MTN Syria and Afrihost; and
• withholding taxes incurred.
The Group’s reported taxation charge decreased by
26,3%** (27,5%*) to R8 346 million for the period.
This was a result of lower current tax due to lower
profit before tax in 2016, lower withholding tax due
to lower dividends upstreamed via MTN Mauritius
and a higher deferred tax credit as a result of an
assessed loss and foreign tax credit in MTN
Mauritius.
Earnings/losses
The Group reported a basic headline loss per share
of 77 cents** largely impacted by the Nigerian
regulatory fine. Excluding this impact in both years,
HEPS declined 63,2% to 423 cents. The attributable
loss per share was 144 cents**, from attributable
earnings per share of 1 109 cents in the prior year.
Financial position
Net debt increased to R51 902 million** compared
to net debt of R31 635 million** reported at the end
of December 2015. The Group reported a net debt/
EBITDA ratio of 1,01 excluding the Nigerian
regulatory fine. The net debt position at the end of
the year was mainly impacted by the following:
• Nigeria regulatory fine payment of R5 870 million**;
• Dividend paid to minority shareholders of
R1 178 million**;
• An increase in cash capital expenditure and
licences to R35 247 million**; and
• Investmentsmademainly inAmadeus (TravelStart),
the Autopage acquisition and cash paid to AIH on
capital calls of R1 867 million**.
Capital expenditure
Capex increased 19,6% (28,7%*) to R34 920 million,
of which R2 654 million was related to foreign
currency movements.
Cash flow
Cash inflows from operations decreased by 3,3% to
R55 681 million**. This was mainly as a result of the
Nigeria payment on the regulatory fine of
R5 870 million, which was offset by an increase in
working capital movements. Dividend payments of
R19 792 million** to equity holders, dividend
payments of R1 178 million** to minorities and tax
payments of R11 704 million** also affected cash
flows. Group cash capex amounted to
R35 247 million** and included the purchase of a
4G licence and spectrum in Ghana (R973 million),
a LTE and fibre licence in Congo-Brazzaville
(R266 million) and a Nigeria spectrum licence
(R1 396 million).
A full set of audited financial statements can be
found online and audited summary
consolidated financial statements can be found on
* Constant currency (organic) information.
** Reported – includes hyperinflation and the relating goodwill
impairment, tower profits, the Nigeria fine and the MTN Zakhele Futhi
impact.
*** The forward-looking financial information disclosed in this integrated
report has not been reviewed or audited or otherwise reported on by
our external joint auditors.
MTN Group Limited Integrated Report 2016 43
PERFORMANCE
DETAILS