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MTN
MTN
MTN - Investcom LLC: Unaudited results
Investcom LLC (Formerly Investcom Holding (Luxembourg), S.A.)
Unaudited results for the six months period ended 30 June 2006
HIGHLIGHTS
- Total subscribers up 26% to 6.14 million from December 2005
- Revenue up 52% to US$ 600 million from June 2005
- EBITDA up 36% to US$ 255 million from June 2005
- EBITDA margin at 42.4%
- PAT up 30% to US$ 131 million from June 2005
- Successful launch of Guinea operation. Increased equity
stakes in key growth markets of Yemen and Sudan.
OPERATIONAL PERFORMANCE
Investcom grew its subscriber base by 26% and exceeded 6 million
subscribers in the first half of 2006. Subscriber growth was driven principally
by the recently launched Sudan operation as well as operations in Syria. Despite
the slower than anticipated rollout in the south of the country (Darfur region),
subscriber additions in Sudan have maintained a strong upward trend. The
subscriber base in Ghana exceeded 2million while the newly launched operation in
Guinea Conakry grew faster than anticipated with 115 000 subscribers at the end
of June.
Subscribers
Jun-06 Dec-05 %change
Ghana 2 018 000 1 820 000 11%
Syria 1 743 000 1 465 000 19%
Yemen 1 023 000 825 000 24%
Sudan 591 000 269 000 120%
Cyprus 78 000 65 000 20%
Benin 346 000 268 000 29%
Guinea Bissau 76 000 44 000 73%
Guinea 115 000 - n/a
Liberia 154 000 109 000 41%
6 144 000 4 865 000 26%
ARPU"s
Jun-06 Dec-05 %change
Ghana 16 18 (11%)
Syria 24 25 (4%)
Yemen 10 10 2%
Sudan 16 22 (27%)
Cyprus 28 32 (13%)
Benin 18 12 50%
Guinea Bissau 18 17 6%
Guinea 16 - n/a
Liberia 24 27 (13%)
Capital expenditure for the six months on property, plant and equipment totaled
US$129 million, marginally up from $120 million in 2005. Capex was focused on
delivering the network roll-out targets in Sudan and continuing investments on
network expansion in Ghana and Yemen. The network roll - out in Sudan is
expected to accelerate in the second half of this year. Rollout obligations in
Syria have substantially been completed. Network capex as a percentage of
revenue in the current period declined to 21.5% from 28.5% in the prior reported
period.
Capex
Jun 06 Dec-05
Ghana 45 52
Syria 17 119
Yemen 3 -
Sudan 30 52
Afghanistan 16 -
Other 12 34
Total 129 257
FINANCIAL REVIEW
Effective 1 April 2006 Investcom stepped up its investments in Sudan and Yemen.
Yemen became a fully consolidated operation with the increase in additional
equity from 43% to 83%, while the equity interest in Sudan was increased by 30%
to 85%.
Revenues
Year on year revenues increased 51.5% driven mainly by the 86.5% increase in
subscribers since 30 June 2005. In addition, the consolidation of Yemen,
previously accounted for as an associate, contributed to the overall increase.
The expansion of the network in Sudan and to a lesser extent the launch in
Guinea Conakry, were also significant changes in the year over year revenue
base. Mednet revenues increased over 60% due to a revised tariff structure and
increased traffic volumes.
Jun-06 Jun-05 %change
Ghana 187 718 141 105 33%
Syria 227 605 186 164 22%
Yemen 31 318 n/a n/a
Sudan 45 695 n/a n/a
Benin 31 038 16 602 87%
Liberia 14 438 13 187 9%
Cyprus 12 992 8 862 47%
Guinea Bissau 6 871 2 495 175%
Guinea 5 418 n/a n/a
Other 37 012 27 143 36%
Total 600 105 395 558 52%
EBITDA
Investcom achieved strong EBITDA growth of 36% on the increased revenues
compared to June 2005. The EBITDA margin rate however, declined from 47.2% at
June 2005 to 42.4% at the end of the current reported period mostly due to the
increase in revenue share from 30% to 40% in the Syrian operations. Recently
launched operations in Sudan and Guinea Conakry negatively impacted the margin
rate while full consolidation of Yemen contributed positively to EBITDA.
Jun-06 Jun-05 %change
Ghana 100 757 80 228 25%
Syria 63 497 74 631 (15%)
Yemen 17 239 - n/a
Sudan 9 535 (4 025) 337%
Benin 14 491 8 382 73%
Liberia 6 684 6 526 2%
Cyprus (2 217) (4 566) 51%
Guinea Bissau 3 837 600 540%
Guinea 500 - n/a
Other 40 179 34 848 15%
Total 254 502 186 520 36%
EBITDA margin
Jun-06 Jun-05 change
Ghana 53.7% 56.8% (3.1%)
Syria 27.9% 40.1% (12%)
Yemen 55.0% n/a n/a
Sudan 20.9% n/a n/a
Benin 46.7% 50.5% (4%)
Liberia 46.3% 49.5% (3%)
Cyprus (17.1%) (51.5%) 34%
Guinea Bissau 55.8% 24.0% 32%
Guinea 9.2% n/a n/a
Other 108.6% 128.4% (20%)
Total 42.4% 47.2% (5%)
PAT
PAT increased 30% compared to June 2005, below the EBITDA drop through rate of
36% due to the impact of one time expenses related to business development
activities of the Group.
Post balance sheet events
Following the acquisition of 100% of the equity of Investcom by the MTN Group,
Investcom was de-listed from the DIFX (Dubai International Financial Exchange)
on 15th August 2006 and from the secondary listing on the LSE (London Stock
Exchange) at the same date. Investcom results and business performance will be
reported as part of MTN Group with effect from July 2006.
Afghanistan successfully launched commercial operations in July 2006 and has
connected almost 60,000 in the first 6 weeks. A funding package totaling US$45
million for Afghanistan was finalized with the IFC including a 9.1% equity
stake.
CONSOLIDATED INCOME STATEMENT
Six months period ended 30 June 2006
Six months ended 30 June
2006 2005
US$ US$
Gross operating revenue 600 105 403 395 557 955
Gross operating costs (242,003,281) (148,467,222)
GROSS
PROFIT 358,102,122 247,090,733
Other operating income 384 937 1 446 577
General and administration
expenses (102,816,467) (60,800,923)
Depreciation, amortization
and goodwill written off (75,442,564) (47,846,169)
Provisions for doubtful
receivables (1,168,322) (1,054,724)
Doubtful
debts written off - (160,997)
PROFIT FROM OPERATIONS 179 059 706 138 674 497
Finance revenue 14 447 032 3 272 638
Finance costs (9 553 341) (10 021
302)
(Loss) gain on exchange (8 908 010) (3 730 299)
Share of
results of associates 5 425 772 8 000 126
Provisions (162,534) -
Success Fees (15 550 535) -
Negative goodwill arising from
acquisition of subsidiaries - -
Gain on sale of held for
trading securities 115 889 310,150
PROFIT BEFORE TAXATION 164 873 979 136 505 810
Income tax expense (33,810,373) (35,881,981)
PROFIT
FOR THE YEAR 131,063,606 100,623,829
Attributable to:
Equity holders of the parent 122 204 569 90 101 400
Minority interests 8 859 037 10 522 429
Basic earnings per share 0.09 0.08
CONSOLIDATED BALANCE SHEET
At 30 June 2006
Audited
2006 2005
June 30 December 31
US$ US$
ASSETS
Non current assets
Intangible assets 579 813 761 348 984 045
Property, plant and equipment 556 345 184 420 423 953
Investments in associates 60 679 58 602 189
Long term accounts receivable 85 708 78 027
Available for sale securities 60 341 80 208
Current assets 1 136 365 673 828 168 422
Inventories 7 200 344 4 762 553
Accounts receivable and
prepayments 281 962 360 166 479 076
Held for trading securities 3 312 728 2 601 543
Bank balances and cash 443 075 589 450 619 409
735 551 021 624 462 581
TOTAL ASSETS 1 871 916 694 1452 631 003
EQUITY AND LIABILITIES
Capital and reserves
Share capital 71 762 876 66 427 428
Share premium 554 972 985 296 737 327
Statutory reserve 2 000 000 2 000 000
Foreign currency translation
reserve 13 312 628 (4 987 308)
Retained earnings 402 036 275 206 159 799
Result for the year 122 204 569 195 876 476
Attributable to equity holders
of the parent 1 166 289 333 762 213 722
Minority interests 95 588 865 133 863 147
Total equity 1 261 878,198 896 076 869
NON CURRENT LIABILITIES
Provisions 660 905 539 253
Long term accounts payable 72 511 017 93 926 479
Term loans 78 237 158 71 899 256
Deferred income tax liability 18 867 836 15 537 947
170 276 916 181 902 935
CURRENT LIABILITIES
Accounts payable and accruals 257 338 414 179 823 986
Taxes payable 53 473 997 21 892 541
Bank overdrafts 10 934 750 74 756 019
Amounts due to shareholders 59 063 8 398 207
Current portion of term loans 57 607 120 42 644 470
Current portion of long term
accounts payable 22 188 397 23 770 364
Other current liabilities 38 159 839 23 365 612
439 761 580 374 651 199
TOTAL EQUITY AND LIABILITIES 1 871 916 694 1452 631 003
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months period ended 30 June 2006
Six months
ended 30 June
2006 2005
US$ US$
OPERATING ACTIVITIES 164 873 979 136 505 810
Profit before taxation
Adjustments for:
Share of results of associates (5 425 772) (8 000 126)
Provisions 162 534 -
Depreciation, amortization
and goodwill written off 75 442 564 47 846 169
Provisions for doubtful debts 1 168 322 1 054 724
Doubtful debts written off - 160 997
Gain on disposal of held for
trading securities (115 889) (310,150
Finance income (14 447 032) (3 272 638)
Finance costs 9 553 341 10 021 302
Operating profit before working
capital changes: 231 212 047 184 006
Inventories (2 437 791) (115 028)
Receivables (62 183 851) (14 445 430)
Payables 123 849 228 40 537 730
Cash from operations 290 439 633 209 983 360
Taxation paid (30 480 485) (31 410,505)
Net cash from operating
activities 259 959 148 178 572 855
INVESTING ACTIVITIES
Acquisition of a subsidiary,
net of cash acquired (58 759 027) 192 747
Acquisition of investments in
associates - (39 542
Disposal of investment in
associates 63 967 281 -
Purchases of property, plant
and equipment (129 495 617) (120 260 751)
Proceeds from disposal of
property, plant, and equipment 1 442 809 -
(Purchases) Sale of held for
trading securities (595 296) 691 131
Proceeds from disposal of
available for sale securities 19 867 581 684
Advance payments on assets
purchased (54 467 753) (33 221 872)
Purchase of intangible assets (224 945 744) (2 551 832)
Acquisition of additional shares
in a subsidiary (43 876 745) -
Dividend income from associates - 11 192 460
Finance income 14 447 032 3 272 638
Net cash used in investing
activities (432 263 193) (179 646 482)
FINANCING ACTIVITIES
Proceeds from term loans 31,079,465 536,864
Repayment of term loans (15,254,529) (3,153,290)
Proceeds from long term accounts
payable 8 665 234 10 217 124
Repayment of long term accounts
payable (33 890 209) (1 641 898)
Proceeds
from/ payment of long term
receivables (7 683) 8 249
Receipts from/(repayments to)
shareholders (8 339 144) (4 372 512)
Finance costs (9 553 341) (10 021 302)
Minority"s share in dividends
distributed by subsidiaries (7 044 925) (1 200 000)
Increase in share capital 263 571 107 -
Net cash from financing activities 229,225,975 (9,626,765)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 56 921 931 (10 700 390)
Net foreign exchange difference (644 482) (67 035)
Cash and cash equivalents at the
beginning of the year 375 863 390 9 446 959
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR 432 140 839 (1 320 466)
Date: 30/08/2006 07:35:33 AM Produced by the JSE SENS Department
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