Mtn Group Ltd S/Adr

Good day everybody and thank you for joining us to discuss the MTN Group Trading Update for the three months ended March 2026. My name is Roy Mutoani. I'm Head of Group Investor Relations for MTN. On the call with me is Ralph Mufita, our Group President and CEO, and Sulu Molefe, our Group CFO. Our Trading Update was published this morning on the JSC. and is posted on our website on the investor relations page. We also released the performer financial information for FY2025 related to the IHS transaction that remains in progress. You would also have seen the Q1 releases from our listed opcores over the past few weeks and I trust that you are able to join their respective investor calls. The running agenda for the call will be as usual. Ralph will start with an overview of the operational performance. He will be followed by Tulu with a review of our financial performance. Ralph will then come back to wrap up with key focus areas and the outlook. We will then move into Q&A. I encourage you to use the webcast platform to send through your questions, which I will then read out at the end. Finally, a reminder that the call is scheduled for about an hour. With that, I'd like to hand over to Ralph Mufisa.

Thank you, Roy, and a very good afternoon or morning to you all, depending on your location. Let's get straight to the results delivered in the period. In Q1 2026, the Group delivered a strong start to our Ambition 2030 strategy against an uncertain global geopolitical environment, but fairly benign economic backlog in key markets. The Group reported both service revenue growth, EBITDA margin expansion, and its strength and balance sheets underpinned by execution of our commercial and strategic priorities and disciplined capital allocation. We deployed capex of 9.6 billion rand over this quarter. Before we get into the details, let me outline the six key messages of our performance in the period. The first point is that we are pleased with the sustained commercial momentum delivered in the quarter. This was led by our businesses in Nigeria, Ghana, as well as Cote d'Ivoire and Cameroon in particular. Performance in markets such as Zambia was also very encouraging. The second highlight is that as a group, we continue to see pleasing growth in our data and FinTech businesses, which showed 35.4% and 20% revenue growth respectively. Underlying these revenue trends, data traffic was up 20.2% and value of fintech transactions rose by a third to $163 billion in constant currency terms. Thirdly, group service revenue grew by 21.1% and the EBITDA margin widened to 47.6%. Both these are in constant currency terms. Fourth, our balance sheet remained strong with group leverage at 0.1%. We also saw good cash upstreaming in the period as well as post the period and Sulu will cover the details on this a little bit later. The fifth point is that we made good progress in our strategic initiatives in our fintech business, most notably the completion of the structural separation in Ghana, our largest fintech market, as well as progress in Nigeria. continue to engage the authorities in Uganda towards the completion of the separation in that market. We also advance the progress of the IHS transaction, engaging regulatory authorities as part of the approval process. And as you can see in our separate SENS announcement, the performer results for 2025 showed that the transaction is value-accretive in terms of service revenue, earnings, and free cash flow. The sixth key message is that in the uncertain geopolitical environment, we remain focused on the resilience of our business. We remain highly engaged with partners such as IHS on diesel supply to ensure that we meet our customary high levels of network availability. In terms of our overall performance, strong commercial execution underpins our sustained growth in the quarter. Overall subscribers grew 5.4% year-on-year, our pace by growth in the number of data subscribers which increased by 8.7% to 175.6 million. Our normal users also grew by more than 8% to 67.4 million monthly active users. Strong structural demands for data continued with the number of petabytes consumed on our network increasing by 20.2%. Our FinTech platform processed 15.8% more transactions in the first quarter of 2026 and at the same period in 2025. And the value of these was up by 32.8% in constant currency terms. On a reported basis, transaction values was up 71%, $263 billion in the quarter. If we turn to our key markets, we see that Intim SA reported solid growth in post-paid enterprise and data revenue. We were encouraged by the above inflation performance of both post-trade and enterprise segments in SA and by the 4.9% growth in data revenue. The prepaid markets continued to be tough in Q1 as expected and previously communicated. Deliberate actions were taken by management to reset the base for healthier and much more sustainable growth over the median term. This resulted in the overall MTN South Africa service revenue increasing by 0.7%. MTN SA reduced its penetration on extra time advances as a percentage of recharges during the period. They have reduced penetration from around 42% to about 34% as of the end of the period. This was done to ensure sustainable advances to customers in order to drive repayment of advances within the month and not to overexpose customers to the impacts of recovery. It is also consistent with what we told the market with our annual results in March. We are working on initiatives to turn this prepaid business around and drive more sustainable growth, but it's not a quick fix. The other deliberate actions that we took and spoke about before or the simplification of bundles and sales and distribution initiatives. We're still encouraged by some of the early trends in cash recharges, as well as prepaid data that are coming through as a consequence of these deliberate actions. Prepaid data grew 3.8% year-on-year in the first quarter, a solid sequential improvement on Q4 2025, which was a growth of 0.8%. MTN SA's network leadership remains a clear differentiator in the market and provides a strong platform to support customer experience, retention and disciplined commercial delivery. MTN Nigeria reported a strong set of results at the end of April in line with the medium term guidance. They grew service revenue by 41.7% in cost and currency. This was led by data revenue which increased by 56.1%. and Fintech Group by 77.8%. The sustained strong commercial momentum, disciplined cost management and accelerated network investment translated into robust demand for a solid financial performance for the service. Towards the end of the period, we saw elevated geopolitical tensions drive energy prices higher, leading to fears of renewed inflationary pressures over the short to medium term. However, this was partly mitigated by the stronger Naira. In a more supportive macroeconomic environment led by a sharp slowdown in inflation, MTN Ghana reported strong service revenue growth of 35.7%. Again, data revenue led the overall results, growing by 52.3% as data traffic increased by 63.4%.

Moving on to Fintech, we saw service revenue increase by 20.1%,