MTN | A pivot back to growth
MTN delivered strong FY'18 results, despite operating challenges in key regions. Group revenue returned to growth and EBITDA margins expanded 50bps y/y. Capex intensity declined 440bps. Consequently, operating cashflows (+5% y/y) increased ahead of revenue (+1% y/y) and EBITDA growth (+2% y/y), delivering a double leveraged effect. We believe cashflows will continue to grow ahead of EBITDA as higher capex intensity over the past three years starts to slow. MTN's leading network will support gains in market share as it has out spent its competitors over the past three years.MTN's investment case rests on management's execution of reducing the Group's risk. Disposals of non-core assets will reduce hard currency debt, while expanding margins and softer capex intensity will ensure enough cash to service debt and increase the Group's dividend.
MTN Group is a holding company engaged in the investment in the telecommunications industry offering voice services via 2G and 3G networks, including prepaid and postpaid airtime, please-call-me message service, international roaming, electronic voucher distribution services and community payphones, mobile and fixed data products, including short message service (SMS), multimedia message services, internet access, MTN MobileMoney, content portal MTN Play, Google SMS information services, USSD services and corporate data services. Co.'s operations are divided into the following three regions: South and East Africa, West and Central Africa, and the Middle East and North Africa.
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