MTN has announced a lower than expected decline in revenues for the third quarter (Q3) 2016 despite troubles in Nigeria.
The telecom giant released its results showing a 1.2 percent decline in revenue in the third quarter of 2016 when compared to similar period of 2015. This was better than the 6.2 percent decline recorded in the first quarter of 2016.
Aside from the improved quarterly revenue, MTN’s update for the period ended 30 September 2016 showed that group subscribers increased by 0.9 percent on the third quarter when compared to the previous second quarter.
MTN South Africa also delivered encouraging improvement in earnings, attributing it to significant network improvement across the Group, particularly in the Nigeria and South African operations.
MTN group further disclosed that it raised Nigeria’s capital expenditure (CAPEX) target for the year 2016 to about $1 billion from $700 million.
Krishna Chetty, acting MTN South Africa Chief Technology Officer said the group is spending on improvements to network-service quality and rolling out broadband offerings.
Ferdi Moolman, CEO MTN Nigeria, told BusinessDay that the company is positioned for growth and investing in different things, especially broadband services.
“We see huge potential and growth in Nigeria and MTN wants to be part of that growth. We would like to take this company from just a telecommunications network to something that is a people’s company,” he said.
Also speaking on the results, Phuthuma Nhleko, MTN Group executive chairman, said:
“During the quarter, the Group embarked on a material transformation project, focusing initially on its key operations in Nigeria and South Africa. A dedicated transformation office was established to drive this transformation to maximise revenue growth, enable a distinct customer experience and ensure operational efficiencies, including concerted initiatives to drive optimal return on investment, with hard targets set for the next 12, 18 and 24 months. Operations are expected to deliver the first results on clearly defined targets in the first half of 2017.”
Over the past 12 months the Group has made a number of senior management changes to ensure efficient operational execution, enhance stakeholder engagement, manage reputational risk and ensure solid governance across its operations.
In June 2016, MTN Nigeria appointed its first ever Nigerian Chief Financial Officer (CFO) since it commenced operations in the country 15 years ago. Telecoms analysts said this was a smart move to help balance the company’s losses due to the huge fine issued by the Nigerian Communications Commission (NCC) last year.
“I believe MTN had to appoint a Nigerian CFO to manage its finances properly in this market and engage with the Nigerian government appropriately. They realised that they need somebody that understands the Nigerian market, government and operations very well,” Emara Abah, a financial analyst told BusinessDay in an interview.
Appointments of new management staff are still ongoing and the company has disclosed that Rob Shuter, the new Group President and CEO will resume office on March 13, 2017 when Puthuma Nhleko will revert to his role as non-executive chairman.
On the allegations of illegal money transfers between MTN and some Nigerian banks, Ferdi Moolman said, “The allegations made against MTN Nigeria are completely unfounded and without any merit.”
Bismarck Rewane, CEO of economic consulting firm, Financial Derivatives Company (FDC) said the new scrutiny of MTN by the Senate will affect international capital flows to Nigeria.
“This is not the time to start throwing tantrums as we prepare to inject stimulus into the economy from government and the private sector, “Rewane said.
MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds.
Commenting specifically on the point of Certificates of Capital Importation (CCIs) in the matter of alleged repatriation of funds, Ferdi Moolman said that no dividends were declared or paid until the CCIs were issued and finalised.