The view of our chairman
Transitioning
to a stronger
MTN
Phuthuma Nhleko, chairman
2017 was a year of positive change for MTN. After a period of many challenges, the group re-established itself as the premier provider of telecommunication and digital services in Africa and the Middle East.
Early in the year, a strengthened senior management team assumed its roles and responsibilities, bringing fresh energy and impetus to the company. Rob Shuter and Ralph Mupita took up the positions of group president and chief executive officer and of group chief financial officer respectively.
I am delighted that they proved themselves equal to the task, settled in quickly and got on top of all the key issues and drivers pertinent to the group's prospects. They introduced a new strategy, BRIGHT, building on the IGNITE business transformation initiative that was launched in late 2016 after a thorough review of the group's capital structure, operations, processes and management capacity and designed to accelerate MTN's commercial performance.
BRIGHT extends the scope of IGNITE to other facets of the business and is central to the group's operational recovery and staff motivation. The IGNITE team is now focused on executing all areas of BRIGHT. The group's 2017 results, detailed throughout this integrated report, show that these initiatives are beginning to bear fruit.
Reported headline earnings per share (HEPS) were 182 cents** compared to a 77 cents** headline loss per share in 2016 when performance had been impacted by the Nigerian regulatory fine of 500 cents**. MTN had reached an agreement with the Federal Government of Nigeria in June 2016 to settle the 330 billion naira fine over three years.
For 2017, the board has declared a second half dividend of 450 cents per share, bringing to 700 cents the total dividend for the year, the same as that in 2016. At the discretion of the board and taking into consideration market conditions, the board anticipates declaring a total dividend of 500 cents per share for 2018, growing at 10% to 20% over the medium term. The rebasing of the dividend follows the marked changes in currency exchange rates across many MTN markets. This will allow MTN to ensure that the dividend is funded from operational cash flows over the medium term.
Looking forward
MTN Group's performance and prospects are most sensitive to the macro-economic conditions of its three largest markets. The Nigerian and South African economies appear to have stabilised and are possibly in recovery mode, buoyed by a strengthening oil price and greater oil production in Nigeria and an improved political outlook in South Africa. Iran's prospects remain uncertain: they depend substantially on the US Congress resolution on the status of the agreement between Iran and the P5+1. We remain hopeful that rationality will prevail and that the recognition of the 2016 agreement between Iran and the five permanent members of the United Nations Security Council and Germany and the European Union will remain unchanged into the future.
Management understands the importance of ensuring that MTN gets the basics right and keeps a close eye on the rapidly evolving competitive environment. This fine balance in the allocation of the group's time and resources will ensure that MTN remains at the cutting edge of innovation and delivers a bold new digital world to customers. This is in line with the group's belief that everyone deserves the benefits of a modern connected life. I am confident that the group has the momentum to achieve this, steered by an ethical and effective leadership team.
Evolving our board
Directors who understand the opportunities and risks that the group faces, as well as the need to create shared value through a stakeholder-inclusive approach, are essential. In 2017, the company continued to evolve its board of directors. Alan van Biljon retired on 31 December 2017 after many years of dedicated contribution to MTN, in which he served in various roles including chairing the audit committee and as lead independent director. I wish to thank him and wish him all the best and a well-deserved rest in his retirement.
Alan Harper assumed the lead independent director role in May 2017 and will lead the board in any instances where a conflict of interest arises. In the period ahead, we will continue to make changes to the board to ensure that while retaining a depth of skills and sufficient institutional memory, we also refresh it with diverse directors who bring new ideas and perspectives.
To this end, I will chair my last AGM on 24 May 2018 and step down from the board on 31 December 2018. Ahead of that, we will identify a new chairman in the second half of 2018 and work to ensure a smooth transition. It has been both an honour and a humbling experience to have served the MTN Group in various capacities since 2001. I wish to thank all the many stakeholders with whom I have engaged over the years – employees, regulators, customers, governments, suppliers, investors, communities and the media – for their contribution. I have no doubt that the people of MTN will continue to strive to make customers' lives a whole lot brighter, and in so doing, deliver on the group's strategy.
| ** | Reported – as reflected in the MTN Group Limited financial results for the year ended 31 December 2017 |