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MTN GROUP LIMITED - Quarterly update for the period ended 31 March 2019

Release Date: 09/05/2019 07:05:00      Code(s): MTN       PDF(s):  
Quarterly update for the period ended 31 March 2019

(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code: MTN)
(ISIN: ZAE000042164)
(MTN or the group)

Quarterly update for the period ended 31 March 2019

MTN is an emerging market mobile operator with a clear vision to lead the delivery of a bold, new digital
world to our 237 million customers across 21 operations. We are inspired by our belief that everyone deserves
the benefits of a modern connected life.

Salient features
- Group subscribers increased quarter-on-quarter (QoQ) by 4,0 million to 236,6 million
- Active data subscribers increased QoQ by 2,6 million to 81,3 million
- Active MTN Mobile Money customers increased QoQ by 1,2 million to 28,3 million
- Group service revenue increased year-on-year (YoY) by 10,0%
- MTN South Africa service revenue increased YoY by 4,6% with an earnings before interest, tax and
depreciation (EBITDA) margin of 38,8% (35,3%*)
- MTN Nigeria service revenue increased YoY by 13,4% with an EBITDA margin of 53,3% (44,2%*)
- Reported growth rates for both service revenue and EBITDA* were higher than constant currency rates 

These results are presented on an IFRS 16 basis adopted on 1 January 2019. 

* For comparative purposes IAS 17 numbers have been provided in brackets. A summary table below provides the 
impact of IFRS 16 on the numbers disclosed in these results. How the IFRS 16 standard being applied in MTN will 
be presented to investors at a pre-capital markets day on 24 May 2019. Full IFRS 16 numbers will be reported in 
our interim 2019 results.

Unless otherwise stated, financial growth rates are presented on a constant currency basis and are YoY 
(three-month period ended 31 March 2019 versus the three month ended 31 March 2018). Non-financial growth
rates are presented QoQ, or 1Q19 versus 4Q18. Data revenue refers to access data revenue only. 

IFRS 15 - Revenue from Contracts with Customers has been implemented with effect from 1 January 2018 and
comparative numbers have been restated where appropriate.

All prior period financial and non-financial numbers have been restated for the disposal of Cyprus for
comparability purposes.

Group president and CEO, Rob Shuter comments:
"MTN's positive commercial momentum continued in the first quarter with a pleasing operational performance
across the markets, led by South Africa, Nigeria and Ghana. Group service revenue grew by 10,0% YoY in line
with our medium-term guidance of double-digit service revenue growth. 

The growth in service revenue was supported by the continued expansion in voice, data and fintech revenue.
Outgoing voice revenue increased by 5,9%, data revenue increased by 18,3% and fintech revenue increased by
30,6%. Digital revenue declined by 45,4%, impacted by the work that continues around optimising our value-added
services business. Currency markets were favourable in the quarter, resulting in reported service revenue growth
higher than constant currency rates. 

We made good progress in our work to build a digital operator, adding 2,6 million active data subscribers
and 1,2 million MTN Mobile Money subscribers. 

We have launched Africa's first instant messaging platform ‘Ayoba' in Ivory Coast and Cameroon and plan
further roll out across other markets in the second half of the year. We will also integrate payments 
into the Ayoba service as part of our broadening of the fintech business.

We continued to invest in our network with reported capital expenditure to the end of March 2019 of 
R5,4 billion (R5,0 billion*). In the quarter, we led network NPS in nine of our markets.

We made further headway in our asset realisation programme. We signed an agreement with American Tower
Corporation (ATC) to buy out our shareholder loan in ATC Ghana.

The successful listing of our e-commerce joint venture, Jumia, provides a market value for our 18,9%
investment and we completed the conversion of MTN Nigeria to a public company ahead of the listing by 
introduction on the Nigerian Stock Exchange anticipated for May 2019. 

We remain committed to achieving our medium-term targets through delivering against all elements of our
BRIGHT strategy and in particular executing our plans to access our growth curves."

MTN's results are presented in line with the group's operational structure. This is South Africa, Nigeria
and three regions: Southern and East Africa and Ghana (SEAGHA), West and Central Africa (WECA) and Middle 
East and North Africa (MENA) and their respective underlying operations.

The SEAGHA region includes Ghana, Uganda, Zambia, Rwanda, South Sudan, Botswana (joint venture equity
accounted), eSwatini (joint venture equity accounted) and Business Group.

The WECA region includes Cameroon, Ivory Coast, Benin, Congo-Brazzaville, Liberia, Guinea-Conakry and
Guinea-Bissau. 

The MENA region includes Iran (joint venture equity accounted), Syria, Sudan, Yemen and Afghanistan.
 
MTN South Africa
MTN South Africa recorded YoY service revenue growth of 4,6%, within our medium-term guidance range of
mid-single-digit growth, buoyed by a strong performance from our wholesale business. Data and fintech revenue
increased by 3,1% and 21,1% respectively, while digital and outgoing voice revenue declined by 35,7% and 4,4%
respectively. 

Given out-of-bundle price reductions taken in the period, and a challenging economic environment, prepaid
service revenue decreased by 5,1%. As previously communicated, we expect that prepaid service revenue will
remain under pressure for a few quarters, before we see recharge resilience and changes in customer behaviour 
drive up in-bundle service revenue. Consumer postpaid service revenue increased by an encouraging 11,5%. 
The enterprise business continued to stabilise and the wholesale business recorded excellent growth with 
contribution from both Telkom and Cell C roaming traffic. 

At the end of the quarter, MTN South Africa had 24,1 million prepaid users (down 4,9% QoQ), 5,9 million
postpaid subscribers (up 1,2% QoQ) and 3,0 million IoT subscribers.

MTN South Africa maintained its position as the country's best network, and registered number one position
in NPS at the end of March 2019.

MTN South Africa's margin on EBITDA was 38,8%. On an IAS 17 basis the margin remained unchanged YoY at
35,3%. 

We note the provisional findings and recommendations of the Competition Commission in its data services
market inquiry and will engage with the Commission constructively, ahead of submitting our response in June 2019.
We remain of the view that significant reductions in data pricing have already been implemented subsequent to
the data analysed in the report, that the urgent release of high demand spectrum will result in lower cost of
data services, and that there is a viable wholesale market that enables smaller operators and MNVOs to provide
compelling propositions to their customers. 

MTN Nigeria
MTN Nigeria reported a solid quarter with service revenue increasing by 13,4% YoY, in line with our
medium-term guidance of double-digit growth. This was led by a 32,4% increase in data revenue and a 12,7% 
increase in voice revenue. A general slowdown in economic activities during the election period impacted 
voice revenue growth.

Growth in data revenue was supported by an increase in smartphone penetration, improved network quality and
a 9,1% increase QoQ in active data subscribers to 20,4 million.

Total subscribers increased by 3,6% QoQ to 60,3 million. 

MTN Nigeria reported an EBITDA margin of 53,3%. On an IAS 17 basis the margin increased to 44,2%, up 
2,4 percentage points YoY, driven by the growth in revenue and effective cost management. 

Southern and East Africa and Ghana (SEAGHA)
The strong performance of the SEAGHA region was mainly driven by MTN Ghana, MTN Uganda and MTN Rwanda.
SEAGHA's service revenue increased by 21,2%. Data and fintech revenues increased across the region. 
Subscribers increased by 3,1% to 45,0 million, supported by MTN Ghana and MTN Uganda.

West and Central Africa (WECA)
Performance of the WECA region was negatively impacted by the underperformance of MTN Ivory Coast, mainly 
as a result of competitive pressures. This dragged WECA service revenue down by 1,4%, however, this is an
improvement from the 5,0% decline of service revenue in 2018. In Cameroon, the operating environment remained
challenging with conflict in the Northwest and Southwest regions continuing, however, MTN Cameroon is tracking 
ahead of our recovery plan. WECA subscribers increased by 5,6% to 32,4 million, led by MTN Cameroon.

Middle East and North Africa (MENA) (excluding Iran)
The MENA region reported a pleasing performance in the quarter, with service revenue up by 22,6% (excluding
MTN Cyprus from the prior year comparison), supported by solid growth in data revenue across the region.
Subscribers increased by 0,3% to 24,1 million.

Progress on our asset realisation programme
We advanced plans to dispose of our shareholding in Mascom Wireless Botswana for a consideration of 
US$300 million. This is expected to be concluded during the second quarter, subject to regulatory approvals.

Early in the second quarter, our e-commerce joint venture, Jumia Technologies AG, successfully raised fresh
capital and listed on the New York Stock Exchange, resulting in a dilution of our shareholding from 29,7% to
18,9%. This investment is now valued at approximately US$560 million as at 6 May 2019. As of 12 April 2019, 
we will no longer equity account for the Jumia investment.

In May 2019, we signed an agreement with American Tower Corporation (ATC) to buy out our shareholder loan in
ATC Ghana at par plus accrued interest for proceeds of approximately US$61 million. The transaction is
expected to close during the second quarter.

In line with simplifying the capital structure of the business ahead of listing, MTN Nigeria is progressing
with the redemption of the preference shares, of which MTN Group's share is approximately US$315 million.

Update on the Attorney General of the Federal Republic of Nigeria matter
MTN took legal action after receiving a demand notice from the Attorney General of the Federal Republic of
Nigeria (AGF) alleging unpaid duties and taxes between 2007 and 2017. The lawsuit challenges the authority 
of the AGF to deal with issues around tax and custom duties. According to the law, oversight for this is the
responsibility of the Federal Inland Revenue Service (FIRS) and Nigerian Customs Service (NCS).

The court heard arguments on the AGF's preliminary objection on 26 March 2019. At the time, the AGF
requested that MTN's lawsuit be dismissed because it was not filed within the appropriate timeframe, which the 
AGF asserted was within three months of receipt of the initial request for a self-assessment. Having considered 
the matter, the judge determined that MTN's lawsuit was not statute-barred, as the company was only required to
file its case within three months of receipt of the actual demand notice in August, which it did. The Federal
High Court delivered its ruling on 7 May 2019, rejecting the notice of preliminary objection filed by the AGF 
in response to MTN's lawsuit to have the AGF's demand for circa US$2 billion dismissed. 
 
We remain resolute that MTN Nigeria has not committed any offence and will continue to defend this position.
 
Court was adjourned to 26 June 2019 for the trial of the substantive case.
 
The financial information on which this quarterly update is based, including constant currency information,
has not been reviewed and reported on by MTN's external auditors. Constant currency information has been
presented to illustrate the impact of changes in currency rates on the group's results. In determining the change
in constant currency terms, the current financial reporting period's results have been adjusted to the prior
period average exchange rates determined as the average of the monthly exchange rates. The measurement has been
performed for each of the group's currencies, materially being that of the US dollar and Nigerian naira. The
constant currency growth percentage has been calculated based on the current year constant currency results
compared to the prior year results. In addition, in respect of MTN Irancell, MTN Sudan, MTN South Sudan and 
MTN Syria, the constant currency information has been prepared excluding the impact of hyperinflation. The
economies of Sudan, South Sudan and Syria were assessed to be hyperinflationary for the period under review 
and hyperinflation accounting was applied.

Fairland 
9 May 2019 

Lead sponsor
JP Morgan Equities (SA) Proprietary Limited

Joint sponsor
Tamela Holdings Proprietary Limited


Subscribers
('000)              
                                             Modernised  Modernised  Modernised  Modernised  Modernised    
Country                                            1Q18        2Q18        3Q18        4Q18        1Q19    
South Africa                                     29 806      30 176      29 471      31 191      30 010    
  Postpaid                                        5 489       5 614       5 734       5 795       5 866    
  Prepaid                                        24 317      24 562      23 738      25 397      24 144    
Nigeria                                          54 529      55 185      56 035      58 197      60 265    
SEAGHA                                           39 737      40 249      41 767      43 692      45 044    
Ghana                                            16 151      16 525      17 111      17 790      18 595    
Uganda                                           10 856      10 511      10 828      11 270      11 713    
Rwanda                                            3 574       3 805       4 203       4 465       4 600    
Zambia                                            5 638       5 747       6 052       6 459       6 381    
South Sudan                                         762         927         958       1 016       1 103    
Botswana                                          1 746       1 746       1 664       1 722       1 703    
Swaziland                                         1 010         988         952         969         948    
WECA                                             28 610      29 451      30 152      30 637      32 361    
Cameroon                                          6 596       6 637       6 922       7 684       8 742    
Ivory Coast                                      10 971      11 257      11 208      11 050      11 357    
Benin                                             4 358       4 517       4 826       4 914       5 114    
Conakry                                           2 655       2 827       2 923       2 791       2 932    
Congo B                                           2 373       2 345       2 382       2 464       2 419    
Liberia                                             915       1 078       1 117         983       1 033    
Bissau                                              742         790         774         752         763    
MENA                                             68 203      67 855      67 959      68 838      68 921    
Iran (joint venture)                             44 551      44 610      44 439      44 780      44 783    
Syria                                             5 617       5 293       5 435       5 605       5 412    
Sudan                                             7 670       7 677       7 600       7 792       8 212    
Yemen                                             4 193       4 213       4 263       4 405       4 251    
Afghanistan                                       6 172       6 062       6 222       6 257       6 263    
Total subscribers                               220 885     222 916     225 384     232 554     236 601    


ARPU
(Local currency)
                                                      Modernised   Modernised   Modernised   Modernised    
Country                                        1Q18         2Q18         3Q18         4Q18         1Q19    
South Africa                                  96,14        94,23        98,33       101,32        93,04    
  Postpaid                                   141,80       140,23       142,78       146,60       141,76    
  Postpaid (excluding telemetry)             262,43       256,26       271,14       281,10       278,50    
  Prepaid                                     77,19        74,64        77,52        80,50        71,72    
Nigeria                                    1 493,09     1 491,28     1 492,25     1 534,73     1 510,01    
SEAGHA                                                                                                     
Ghana                                         20,13        21,08        19,38        23,00        21,23    
Uganda                                     7 914,00     8 010,00     8 463,00     8 775,00     8 616,00    
Rwanda                                     1 960,18     1 971,52     2 031,64     1 914,06     1 898,71    
Zambia                                        27,57        28,66        30,05        30,23        26,97    
South Sudan                                  477,84       678,47       678,63       710,00       804,38    
Botswana                                      76,26        76,26        75,21        73,00        67,14    
Swaziland                                     92,83        90,01        99,85       113,74       100,09    
WECA                                                                                                       
Cameroon                                   2 518,35     2 534,53     2 408,00     2 178,00     2 025,11    
Ivory Coast                                2 261,27     2 260,85     2 053,72     2 307,00     1 979,53    
Benin                                      2 941,08     2 690,45     2 745,06     2 809,19     2 840,22    
Conakry                                   18 426,75    17 371,94    16 995,08    17 524,00    18 270,13    
Congo B                                    3 263,37     3 356,65     3 789,47     3 673,47     3 472,56    
Liberia                                        3,47         3,14         2,67         3,17         2,72    
Bissau                                     2 153,93     2 316,82     1 979,81     1 489,93     1 696,98    
MENA                                                                                                       
Iran (joint venture)                     159 303,00   167 793,00   175 049,22   181 284,00   182 205,00    
Syria                                      1 032,71     1 129,02     1 244,15     1 114,48     1 188,01    
Sudan                                         35,25        39,88        42,35        49,79        51,46    
Yemen                                        921,59       982,79     1 020,19     1 034,72     1 069,29    
Afghanistan                                  116,92       134,77       139,39       128,45       119,99        


ARPU
(US dollar)
                                                         Modernised  Modernised  Modernised  Modernised    
Country                                            1Q18        2Q18        3Q18        4Q18        1Q19    
South Africa                                       8,06        7,45        7,06        7,08        6,68    
Nigeria                                            4,14        4,13        4,12        4,22        4,17    
SEAGHA                                                                                                     
Ghana                                              4,50        4,60        4,02        4,70        4,05    
Uganda                                             2,17        2,12        2,25        2,36        2,33    
Rwanda                                             2,32        2,13        2,35        2,54        2,15    
Zambia                                             2,82        2,87        2,90        2,63        2,25    
South Sudan                                        3,60        4,93        4,67        4,70        5,19    
Botswana                                           7,60        7,60        7,24        7,10        6,20    
Swaziland                                          7,78        7,12        7,17        8,02        7,19    
WECA                                                                                                       
Cameroon                                           4,66        4,60        4,28        3,79        3,53    
Ivory Coast                                        4,19        4,10        3,65        4,01        3,45    
Benin                                              5,45        4,88        4,88        4,88        4,95    
Conakry                                            2,05        1,93        1,89        1,93        2,01    
Congo B                                            5,94        5,99        6,69        6,38        6,04    
Liberia                                            3,47        3,14        2,67        3,17        2,72    
Bissau                                             3,99        4,21        3,52        2,59        2,96    
MENA                                                                                                       
Iran (joint venture)                               4,32        4,05        2,52        1,98        2,14    
Syria                                              2,37        2,58        2,84        2,54        2,71    
Sudan                                              1,45        1,37        1,45        1,12        1,08    
Yemen                                              2,38        2,58        2,68        2,72        2,81    
Afghanistan                                        1,69        1,90        1,90        1,70        1,60    
                                                 

Average exchange rates
                                                                               ZAR:LC     
                                                                       strengthening/    
                                            March           March          (weakening)   
ZAR: local currency                          2019            2018                   %    
Nigerian naira                              25,98           30,20               (14,0)   
Iranian rial                             6 108,30        3 089,54                97,7    
Ghanaian cedi                                0,38            0,38                   -    
Cameroon franc                              41,25           45,86               (10,1)   
Ugandan shilling                           264,79          304,79               (13,1)   
Syrian pound                                31,46           36,59               (14,0)   
Sudanese pound                               3,42            2,04                67,6    
                                                                               LC:USD     
                                                                       strengthening/    
                                            March           March          (weakening)   
USD: local currency                          2019            2018                   %    
South African rand                          13,92           11,92               (16,8)   
Nigerian naira                             362,09          360,24                (0,5)   
Iranian rial                               85 006          36 848              (130,7)   


Service revenue
Rm
                                                                             Constant     
                                                              Reported       currency     
Country                              Q1 19          Q1 18            %              %    
South Africa                         9 092          8 693          4,6            4,6    
Nigeria                             10 845          8 232         31,7           13,4    
SEAGHA                               6 097          4 851         25,7           21,2    
WECA                                 5 176          4 739          9,2           (1,4)   
MENA (excluding Cyprus)              1 940          1 645         17,9           22,6    
Group (excluding Cyprus)            33 210         28 133         18,0           10,0    


EBITDA margin
                                                   IAS 17       IAS 17        IFRS 16     
                                                    Q1 18        Q1 19          Q1 19    
MTN South Africa (%)                                 35,3         35,3           38,8    
MTN Nigeria (%)                                      41,8         44,2           53,3    
Group capex (Rm)                                    3 880        4 991          5 358


Appendix - MTN Nigeria

Condensed consolidated income statement                                                    
for the                                                                                    
                                                               Financial      Financial    
                                                                  period         period    
                                                                   ended          ended    
                                                                31 March       31 March    
                                                                    2019           2018    
                                                                      Nm             Nm    
Revenue                                                          282 093        249 223    
Other income                                                          24             20    
Direct network and technology operating costs                    (55 892)       (71 295)   
Costs of handsets and other accessories                           (3 096)        (1 515)   
Interconnect and roaming costs                                   (26 790)       (25 055)   
Staff costs                                                       (7 765)        (6 681)   
Selling, distribution and marketing expenses                     (21 416)       (21 400)   
Government and regulatory costs                                   (7 667)        (6 876)   
Impairment of trade receivables and contract assets                 (718)           545    
CBN resolution                                                         -              -    
Other operating expenses                                          (8 339)       (12 767)   
EBITDA                                                           150 432        104 201    
Depreciation of property, plant and equipment                    (49 247)       (33 410)   
Amortisation of intangible assets                                 (7 317)        (6 701)   
Impairment of goodwill                                                 -              -    
Operating profit                                                  93 868         64 090    
Net finance costs                                                (23 772)       (15 452)   
Profit before tax                                                 70 096         48 638    
Income tax expense                                               (21 655)       (16 435)   
Profit after tax                                                  48 441         32 203    
Attributable to:                                                                           
Equity holders of the company                                     48 441         32 203    
Non-controlling interests                                              -              -    
                                                                  48 441         32 203    


Condensed consolidated statement of comprehensive income
for the
                                                               Financial      Financial    
                                                                  period         period    
                                                                   ended          ended    
                                                                31 March       31 March    
                                                                    2019           2018    
                                                                      Nm             Nm    
Profit after tax                                                  48 441         32 203    
Other comprehensive income after tax:                                                      
Items that may be reclassified to profit or loss:                                          
Available-for-sale financial assets                                   (6)          (237)   
Gains arising during the year                                         (6)          (237)   
                                                                                           
Other comprehensive income for the year                               (6)          (237)   
Attributable to equity holders of the company                         (6)          (237)   
                                                                                           
Total comprehensive income for the year                           48 435         31 966    
Attributable to:                                                                           
Equity holders of the company                                     48 435         31 966    
                                                                  48 435         31 966    


Condensed consolidated statement of financial position
for the
                                                               Financial      Financial    
                                                                  period         period    
                                                                   ended          ended    
                                                                31 March       31 March    
                                                                    2019           2018    
                                                                      Nm             Nm    
Non-current assets                                             1 264 122        705 682    
Property, plant and equipment                                  1 135 025        564 693    
Intangible assets and goodwill                                   113 044        124 115    
Capitalised contract costs                                         3 978          3 391    
Deferred tax and other non-current assets                         12 075         13 483    
Current assets                                                   182 037        259 271    
Trade and other receivables                                       42 540         52 445    
Other current assets                                              63 294         87 197    
Restricted cash                                                   21 852         42 683    
Cash and cash equivalents                                         54 351         76 946    
                                                                                           
Total assets                                                   1 446 159        964 952    
Total equity                                                     194 788        106 109    
Attributable to equity holders of the company                    194 788        106 109    
Non-current liabilities                                          719 135        275 769    
Interest-bearing liabilities                                     127 071        144 543    
Deferred tax and other non-current liabilities                   592 064        131 226    
Current liabilities                                              532 236        583 075    
Interest-bearing liabilities                                     124 723        155 170    
Trade and other payables                                         274 563        331 839    
Other current and tax liabilities                                132 950         96 066    
                                                                                           
Total equity and liabilities                                   1 446 159        964 952    


Condensed consolidated statement of changes in equity
for the
                                                               Financial      Financial    
                                                                  period         period    
                                                                   ended          ended    
                                                                31 March       31 March    
                                                                    2019           2018    
                                                                      Nm             Nm    
Opening balance at 1 January                                     106 109        100 898    
Adjustment on initial application of IFRS 15                           -          1 447    
Adjustment on initial application of IFRS 9                         (384)             -    
Restated balance at 1 January                                    105 725        102 345    
Total comprehensive income                                        48 435         31 966    
Profit after tax                                                  48 441         32 203    
Other comprehensive income after tax                                  (6)          (237)   
Dividends declared                                               (73 000)       (38 613)   
Other movements                                                  113 628         10 410    
Attributable to equity holders of the company                    194 788        106 109    
Non-controlling interests                                              -              -    
Closing balance at 31 December                                   194 788        106 109    
                                                                           
                                                                           
Condensed consolidated statement of cash flows                             
for the                                                                    
                                                               Financial      Financial    
                                                                  period         period    
                                                                   ended          ended    
                                                                31 March       31 March    
                                                                    2019           2018    
                                                                      Nm             Nm    
Net cash generated from operating activities                     (22 467)       111 851    
Cash generated from operations                                    71 184        150 749    
Interest received                                                  4 110          9 451    
Interest paid                                                    (24 761)       (10 693)   
Net cash used in investing activities                            (48 551)       (77 272)   
Acquisition of property, plant and equipment                     (63 140)       (56 254)   
Acquisition of intangible assets                                    (427)          (884)   
Realisation of bonds, treasury bills and foreign deposits          3 746        (17 966)   
Decrease in restricted cash                                       15 367         (1 250)   
Movement in other investing activities                            (4 097)          (918)   
Net cash used in financing activities                             72 433        (46 565)   
Proceeds from borrowings                                         101 701         75 426    
Repayment of borrowings                                          (24 792)       (30 334)   
Dividends paid to equity holders of the company                  (73 000)       (37 657)   
Other financing activities                                        68 524        (54 000)   
                                                                                           
Net decrease in cash and cash equivalents                          1 415        (11 986)   
Net cash and cash equivalents at beginning of the year            53 012         89 749    
Exchange gains/(losses) on cash and cash equivalents                 (75)          (817)   
Net cash and cash equivalents at end of the year                  54 351         76 946    


Impact of the adoption of IFRS 16
IFRS 16 was issued in January 2016, and is mandatory for financial years commencing 1 January 2019. 
Under the new standard, an asset (the right of use of the leased item) (ROU) and a financial 
liability to pay rentals are capitalised and recognised. The impact on the group's statement 
of comprehensive income, resulting from the adoption of the IFRS 16, is the depreciation and 
finance cost that replaced the rent charges under the IAS 17.

As at the reporting period, total recognised ROU assets and liability were N507,1 billion and 
N503,2 billion respectively. Total operating costs declined by N25,8 billion, improving EBITDA 
by same amount. On the other hand, depreciation and finance costs increased by N13,5 billion 
and N16,8 billion, following the adoption of IFRS 16, which depreciates the ROU asset as well 
as implicit finance cost charge on the ROU liability.




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Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.