MTN | Monetising the core
MTN's credibility continues to improve as its adjusted HEPS increased 12% in H1'19, the first time in five years. Organic revenue growth of c.10% is ahead of other emerging market peers like Vodacom (+4x%), highlighting the benefit of participating in higher growth markets. Despite the potential higher growth of competing in markets such as Nigeria and Iran, MTN's results over the last five years have pointed to the challenges of the riskier markets. In our view, MTN's issues have been a result of inappropriate governance structures which has improved with meaningful engagement with local governments, local representation at a group level and better control of risks. Consequently, the growth and improved operating controls have increased EBITDA margins 200bps y/y to 37.1% in H1'19, below peak Group margins of 50% in FY'14.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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