MTN have their half year results this morning

MTN have their half year results this morning hitting the streets, around 8:30 this morning. The first big difference is a maiden interim dividend, of 151 cents per share. Again the currency has hurt the company, as they explained the average Rand Dollar rate for the first half last year was 9.06 and in this half it was 7.52. As such revenue was hurt, down 2.2 percent to 56 billion Rands for the first half. On a same currency basis, the increase in revenue would have been closer to 13 percent.



Earnings before interest, tax, depreciation and amortization or EBITDA decreased 1.1 percent to 24.2 billion Rands. In the same constant currency measure, EBITDA would have been 16.3 percent better. In fact the company segregates it by key geographies: "strong EBITDA growth in local currency in key markets including South Africa (15,9%), Nigeria (15,1%) and Iran (67,3%)." In fact EBITDA margins have improved to 43.3 percent across the group. And that all translates to an adjusted headline earnings per share increased by 20.6 percent to 438.6 cents per share.



The effective tax rate increased to 36.8 percent, when compared to last year, 33 percent. Astonishingly net debt is low, 5.2 billion Rands at the end of the period. As the company points out, "the reduction in net debt was mainly due to higher cash balances across the Group, particularly in Nigeria and Iran, and to a lesser extent in MTN's holding companies."



An interesting recent development is the Mobile Money roll out, which now had 2.2 million subscribers as of 30 June 2010. And it is not surprising that most of those subscribers are in East Africa, Uganda to be specific, which accounts for 43 percent of these users. What is mobile money and how does it work?



As per their website, "MTN MobileMoney is a convenient secure and affordable way of sending money, buying airtime, and making basic utility payments from your MTN mobile phone. This service is offered by MTN across its operations in partnership with local banks. The MTN MobileMoney services are available to all MTN customers. Non-MTN users can also use the service to send and receive money domestically by visiting an authorized MTN MobileMoney agent."



Across their key geographies, what's up there? The Nigeria subscriber base grew to 35.1 million folks, that is a 14 percent increase. MTN does make the point that penetration has grown to 45 percent in Nigeria, of which they have a 51 percent share. Average Revenue per User or (ARPU) fell to 11 US Dollars a month. There were improved infrastructure rollouts, but as they point out, the backbone project is 81 percent complete.



Local is lekker, the South African business grew its market share to 36 percent with the subscriber base of 17.1 million now. That is a 6.4 percent growth in this mature market. Prepaid ARPU's increased to 109 Rands per month, Postpaid (those are contracts) decreased 29 bucks, yowsers, "...mainly due to the continued lower out-of-bundle usage and migrations to lower-value packages which are both indicative of
the slow pace of the recovery of the local economy and a stricter credit policy."



Iran, up to 27 million subscribers. ARPU's increased marginally to 8 US Dollars. Wow, a little stingy with their usage over there in Iran, come on guys get with the program. MTN are rolling out WIMAX services in the two big centres in Iran WIMAX stands for Worldwide Interoperability for Microwave Access. And according to Wiki, WIMAX "is a telecommunications protocol that provides fixed and fully mobile internet access."



We will update clients further to these results released today and make more pointed observations about the future of the business as we see it.