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Q & A with the CFO
continued
Q
MTN set some specific financial targets for 2017. Were these met?
A
This table shows how we delivered against the guidance we provided to the market:
Guidance
for 2017
Performance
vs guidance Status
MTN South Africa service revenue growth
Mid single-digit
3,9%
^
●
MTN South Africa EBITDA margin
Up 0,5 to
1,0 pp
Up 2,0 pp to
34,6%
●
MTN Nigeria revenue growth
Upper single-
digit
11,4%
●
Group capex
R30 billion
R31,5 billion
●
Dividend (per share)
700 cents
700 cents
●
^Organic revenue adjusts for prior year disposals and alignment of postpaid carry over rules.
•
Met guidance.
•
Partially achieved guidance.
Q
What are your financial targets over the medium term?
A
We expect the initiatives we have established as part of BRIGHT to deliver growth and attractive
total shareholder returns. Over the next few years we expect to deliver upper single-digit constant
currency growth in service revenue for the group, driven by mid single-digit growth in South
Africa and double-digit growth in Nigeria. Over the same period, we expect to see an expansion
in group EBITDA margins.
Our extensive capex investments in 2017 allowed us to show a credible improvement in our
networks in many markets. This will be important in ensuring the business is able to provide a
superior customer experience and competitive data networks which will support the growing
demand for data and digital services. Over the next few years we expect group capex intensity,
which measures our efficiency in deploying assets, to moderate within a range of 20% to 15%.
We want to have an optimally geared balance sheet that is aligned to the risk profile of the
business, aswell as providing the financial flexibility forMTN to participate in growth opportunities
as these arise. We will target an adjusted holding company gearing of 2,0 to 2,5x over the medium
term. As at end of 2017 that gearing level was 2,7x.
Q
MTN is planning to list its operations in Nigeria and Ghana. How does MTN
think about capital allocation for proceeds that may come from listings and
asset sales?
A
Firstly, the MTN operations in Nigeria and Ghana are excellent businesses, with strong market
positions and leading networks. We are not looking at these listings as significant monetisation
opportunities and we are listing to meet regulatory requirements. IHS is a major asset, but we
would look to partially monetise it over time. In the medium term, any proceeds from listings and
asset sales would be prioritised as follows: deleveraging; investing in growth opportunities; share
buybacks and; finally, special dividend distributions.
34
MTN Group Limited
Integrated Report 2017