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MTN to Exit Middle East

MTN

MTN Group has confirmed that it will focus its strategy on its core African markets in the medium-term future.

Announcing strong first half results despite the ongoing challenge of Covid-19, MTN stated that it had added 11 million subscribers in the first six months of the year to reach a total base of 262 million. By end June 2020, MTN had 102 million active data users and 38 million active Mobile Money users.

The group’s president and chief executive officer Rob Shuter said: “As we navigate the pandemic and its effects, we have prioritised looking after our people, customers and networks while focusing on efficiencies”, noting that the company’s staff were largely working from home and that Y’ello Hope Packages were providing financial relief for its customers.

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“As part of our ongoing portfolio review, we believe the group is best served to focus in the future on our pan-African strategy. We will therefore be exiting the Middle East in an orderly manner over the medium term. As a first step we are in advanced discussions to sell our 75% stake in MTN Syria,” he added.

MTN reported service revenue growth of 9.4% to R80 billion and EBITDA growth of 10.9% to R42 billion as efficiency initiatives saw its profit margins continue to improve. Headline earnings per share after non-operational impacts grew by 54%, operating free cash flow increased by 117.8% and ROE improved further to 14.1%.

Despite lockdown restrictions impacting network rollout, MTN Group invested R10 billion in capital expenditure across our markets and brought a further 54 million people into 3G and 4G coverage. The focus on affordability of data saw the average rate per megabyte reduced by 34%.

The group made progress on its asset realisation programme, concluding the disposal of the tower company investments in Ghana and Uganda for R8,8 billion.

MTN did not declare an interim dividend given the continued uncertain impact of COVID-19 on the operating environment but will consider a final dividend should conditions warrant.