MTN Group Limited (MTN) Earnings Call Transcript & Summary

Good afternoon, and welcome to MTN Group's results presentation for the year ended the 31st of December 2021. I trust you're all safe and well as we continue to navigate life as we currently know it. My name is Thato Motlanthe, and I'm the Executive for Investor Relations for the MTN Group. I'm pleased to say that for the first time since the beginning of the pandemic, we're hosting a hybrid presentation. So we're happy to welcome a small audience with us in the MTN Innovation Center. It includes some of our colleagues as well as some of our shareholders who took up the invitation to come and join us. A warm welcome also to the MTNers across our markets as well as everyone who's dialed in through the various channels through the webcast or watching on BDTV and the MTN YouTube channel. Let's first get through some of the housekeeping before we get started. And on the screen, you should be seeing our standard disclaimer and safe harbor statement, and that covers the presentation for today. For those of us who are in the room, just a quick reminder of our emergency exits. There's 1 to my right and 1 towards the back of the auditorium. Hopefully, we won't be needing them. So just turning to the period under review and just to set some context. Obviously, the past year has brought continued challenges in the context of the pandemic, and it's brought challenges for companies around the world, and of course, including MTN. Our business has, however, demonstrated true resilience as we've continued to roll up our sleeves and to swiftly respond to many of these challenges and taking the lead in evolving the landscape we find ourselves in. We're driven by the belief that everybody deserves the benefits of a modern connected life. The presentation today will reflect on last year's operational, financial and ESG performance and provide some thoughts on our positioning for the coming year 2022. In terms of some of the agenda items, the program will run as follows. So the MTN Group President and CEO, Ralph Mupita, will come on stage, and he'll provide us with some strategic and operational overview. Following this, Tsholofelo Molefe, our Group CFO, will come and provide some financial highlights, and then Ralph will come back to provide us some of our -- to provide us thoughts on some of our key focus areas for the coming year. We will then open the floor for questions and answers, which Ralph and Tsholofelo will respond to. And just to note at this point that those who have dialed in through our webcast can actually submit the questions through that platform. For those of us who will be treating during the presentation, the hashtag is MTNAnnuals21, and the Twitter handle is @MTNGroup. It is now my pleasure having gone through all the admin to welcome to the stage, Ralph Mupita, our Group CEO. Thank you very much.

Thato, thanks very much, and a very good afternoon for myself as well, extending a warm welcome to everybody who's dialing in. As Thato has mentioned, we do have a change for the first time in the last 2 years, we do -- where we actually do have guests that are at 14th Avenue. And as Thato said, we have a couple of shareholders who are here. So I want to extend our thanks for you for joining us here at 14th Avenue. And also I want to extend thanks to the MTNers around the 19 markets who are the real heroes of the strong results that we've delivered over the past year and a strong hello from Tsholo and thanks for the strong contribution that you provided in terms of the very pleasing results that we've released today. And I'm sure the shareholders have now had a chance to read the sense and taken a view on how the company is doing. Before I start the operational review, I wanted to start off by providing a context and rationale to the enhanced guidance that we provided today as well as the changes that we've made to the dividend policy. There's a very strong interaction between the way we're thinking about the business and the growth opportunities that we see. We're very encouraged by the performance of the business, showing strong resilience in a challenging macro, but we feel confident enough to be able to enhance the guidance on the back of the structural trends that we're seeing. And that obviously has an interaction with our capital allocation framework and therefore, how we think about dividends going forward. So let me start there and provide a context to how we, as MTN, are seeing the future and positioning ourselves for growth. As I said, we are remaining resilient and accelerating growth in actually quite challenging environments. Occasionally by COVID-19, I think we've seen that there's been a subdued economic growth across many of our markets. And that obviously is a statement that goes more broader than Africa more globally. We have seen currencies weakening, particularly against the dollar as well as against the rand, which is our reported currency seen volatility in oil prices and beginning to see inflation coming through. But we've been encouraged by the reopening of the economies that we're seeing across our markets and just the sheer resilience of the business and how it's positioned to be able to take advantage of what we're seeing as a structural acceleration in digital services. And as a reminder to where the company is, we have second to none networks that are well invested in. We have a leading brand and very strong market positions. Those in combination with the people that we have in our company have given us the resilience to be able to deliver the strong results that we have. So at the core is that even through this COVID pandemic and the reopening of the economies, we've actually seen the acceleration remain structural and actually accelerating even further than when we were during the COVID pandemic. And I want to share a slide that provides some context to how we're seeing what we're calling structurally higher demand for the services that we offer. Our results have been driven predominantly by data traffic as well as by the fintech transaction volumes. So what you have on the left-hand side of the chart is an indexation of the data traffic through our network, pre-COVID into the period where COVID was relatively intense and then the easing of lockdown. Now the data point on the easing of lockdowns, we've kind of used Google trends, mobility trends, we looked at transportation across our markets. So it came out that is more around the end of quarter 4 2020. So last year was actually a year where you can consider in our markets that they were actually relatively open. So when you look at it and you look at the indexation to quarter 1 2019 and to the start of COVID-19, on a quarterly basis, we were getting about 267 petabytes of data through our network. COVID came along. We accelerated to 556. The economy is open further. Yes, there were still some lockdowns and we moved to 781. So an acceleration in terms of the demand of our services and how the business actually has performed. There's been a lot of narrative that the growth that we've seen is because of the lockdown arrangements. What we want to say is that actually, in our markets, they're actually relatively open. South Africa may be a bit of an outlier and Uganda, which has now opened up would be kind of the outliers but the main point that you see here is that actually there's an acceleration. And you index back to quarter 1 2019, we actually have 5x the data traffic in our network. I think what's also been pleasing in the way that we've performed is taking on the load of data traffic. We've been able to do it with a reasonable CapEx budget and you've seen our returns improving over time. So the data traffic has not resulted in poor financial performance of the company, we've been able to manage our CapEx envelopes, our investments, the expense efficiencies in the business to see accelerating growth. If you move to the right, you now look at fintech transactions. So again, indexing to quarter 1 2019. The pattern is the same, 2.5x the volume of fintech transactions. In last year, we had 10 billion worth of transactions through our fintech ecosystem. Again, the trend is very clearly accelerating. And the trends that we've seen and the performance of the business is what has given us the confidence to within 1 year to be able to enhance the guidance that we provided last year. And the main guidance points, you'd be familiar with our medium-term financial guidance, which we released last year. And we are making some amendments to that to reflect the structural growth trends, the performance that we have and our own views of what will happen over the next 3 to 5 years within the company. So the first change we've made is group service revenue moving from low to mid-teens to mid-teen performance. You know that in 2021, we did 18.3%. So we're already above that guidance. South Africa, we'll maintain the same, which we generally read as 4% to 6% within the current environment, we think South Africa delivering within that range would be very good performance. Nigeria, they upgraded their guidance at the end of January. So you know that number, at least 20%. On the holdco leverage, I think what we've been pleased with is the faster deleveraging that we wanted to see on the balance sheet actually has happened over the last 12 months. Our focus is on faster deleveraging of the non-ZAR debt that we have. We paid down the dollar debt -- we paid down some of the 2022 bonds early last year. We do have both 2024 and 2026 bonds that is still part of our capital structure and probably about ZAR 20 billion equivalents. If you look at current exchange rates, we're signaling that we want to be able to have as little dollar debt as possible on the balance sheet to give us more financial flexibility to pursue the growth that we see. Now as much as we're signaling the growth and also signaling that the CapEx envelope will move a little higher from where it was today, we're also committing to our shareholders that we are responsible allocators of capital, who ultimately will deliver returns higher than what you've seen. So in this prior year, we did 19.6% as return on equity, we are committing to our investors that within this growth trajectory that we see as structural and stronger, and we're seeing returns improving the additional capital that we'll be putting into our networks and platforms ultimately would deliver greater returns. And we think that, that framework is what we can deliver over the next 3 to 5 years, and we're committing ourselves to that. The capital allocation framework, obviously, the underpin of how we think about growth and how we need to make decisions. At the end of the day, we have a responsibility. One of our major responsibilities is allocating capital judiciously and into areas of faster growth. So we have a very specific batting order, which is going to drive and discipline us over the next couple of years. We are going to put capital to the fast growth areas that we see in the business that will drive the return. And that's what we call the battling order #1 around our organic growth. The leverage point is certainly batting order #2. And then the return to -- of cash to shareholders through dividends is batting order #3. We believe that the first 2 provide more value and growth for investors over the medium term and hence, reemphasizing the priorities. M&A, share buybacks and special dividends followed through within that batting order. And with that growth outlook with the capital allocation framework, we have revised the dividend policy, and I'll come back to that. But first of all, cover the dividend declared for FY 2021. We did commit to investors that we would deliver a minimum ZAR 2.60, given the suspended dividend of the prior year. I'm pleased to announce that the Board has approved and made the decision to pay an ordinary dividend per share of ZAR 3.30, higher than the minimum we guided. We believe that this is a very balanced decision in light of our capital allocation priorities and batting orders. And this balance is also progress we've seen in our asset realization program. The cash upstreaming we've seen, particularly in Nigeria, the faster deleveraging that we've been able to deliver and leaving liquidity headroom for investments in the near to medium term. So the ZAR 3.00, we feel is appropriate and creates the right balance. In terms of the future dividend policy, we're announcing the dividend policy, which we're calling an annual dividend declaration, where the Board guides on a minimum dividend in the year ahead, again, aligned to the capital allocation priorities. And we're saying that we anticipate paying a minimum ordinary dividend per share of ZAR 3.30 for FY 2022, and that will be paid as a final dividend, no interim dividend in the calendar year 2023. I wanted to start out with these announcements because I think they're important in positioning how we think about capital allocation and also the linkage towards the growth prospects that we have. Just moving on to the operational review and focusing on the major selling points. I won't cover the financial highlights. I think you read them and Tsholo Solo will take us through them in much detail but just calling out faster earnings growth that we've seen, adjusted headline earnings per share up by just shy of 27%. Again, faster deleveraging that we've seen on the balance sheet, the holdco leverage now at 1x, down from 2.2x same period on the prior year. And then obviously, cash flow, operating free cash flow growing at about 35% on an organic basis, and then the returns, as I mentioned, improving to 19.6%. So all in all, strong financial delivery, which Tsholo will take us through in our section. If I look at our major markets, starting with South Africa, I think the issue of a challenging macro is well known in South Africa. Unemployment, particularly in the second half of the year where we saw job losses in some of the industries that were affected by COVID restrictions. We, as MTN South Africa, focused on investing in our network put ZAR 9 billion of CapEx into the network for capacity coverage and resilience, and that helped us to maintain our #1 position. I do want to make a call out here that we are very pleased by the South African performance where all core businesses contributed to growth. The service revenue growth of 6.5% is above our guidance range and to the SA team very well done in 2021. So all in all, the South African business are doing very well. Some pressure towards the end of the year around prepaid, particularly at the lower end. But our CVM initiatives, I think, should bring us into a decent position. That's a function of the pressure that you're seeing at the lower end of the market. But all in all, very strong growth coming out of South Africa. Nigeria, again, I'll touch on the key highlights, and you've seen these results from Karl and the team. The major issue in the Nigerian context in last year was really the SIM registration issues. I'm pleased to say that at the end of quarter 4, we started seeing net additions back in the Nigerian base, 1 million net additions after the growth of the business because we couldn't register any new subscribers. The trends we saw in quarter 4 have come through in the first 2 months of this year. So we encourage that we're seeing Nigeria back in subscriber growth. So very strong 4G build-out of the network. We did allocate more CapEx to them on the back of strong growth that you've seen in the data and obviously picking up a lot of data traffic, 85% data traffic growth in the prior year. We're also pleased to see that we had some progress on the PSB. As you all are aware, we had an approval in principle. This is what we've been looking forward to in the last 2 years to retain get our fintech business in Nigeria, also scaling over time. And we've been interacting with the Central Bank of Nigeria to get all our approvals in place, and we await the decisions of the CBN. So very, very strong results from Karl and the team in Nigeria, encouraging us as well as we have now upgraded the guidance for service revenue within that business. The other markets are looking at SEA, WECA and MENA. I think we've seen broad-based growth across the regions. I think a couple of highlights to pick up all the regions growing obviously above the group service revenue guide, a performance of 18%, SEA very strong and WECA strong as well. And I think in WECA, we also have to remember that many markets are basically indexed to the euro, so very low inflation environment. So getting an 18.4% growth has been very strong. All the regions have been accretive from an EBITDA margin perspective, so driving profitability all the way to the bottom line and cash flow. If I look at fintech, again, a very strong story and performance around our fintech business, just again, reemphasizing the strength of that ecosystem, 10 billion transactions $239 billion worth of transaction value. And the main verticals within the fintech business, Wallet, Banktech, Merchant Payments and E-commerce performing very well. We signed up a joint venture with Sanlam on the insurtech going through regulatory approvals now. So we should be able to launch that in the second half of this year and also start to see the insurtech business grow strongly. And we secured partnerships that are really helping us in particular, drive the merchant ecosystem, which I'll talk to, which is critical for the growth of this business going forward. Still on fintech. I think, as I mentioned, a really important part is the ecosystem expansion that we've seen in the business. So we had 57 million monthly active users at the end of the year, up from 46 million. One of the key strategies has been that we want to see base penetration, and we feel that we will get the business growing very strongly when we get to about 70%. So what we saw on the base penetration as we move from 40% to 46%, so starting to see an acceleration of our own GSM customers using mobile money services. Obviously, a big progress was to get the PSB AIP in Nigeria. The merchant and agent ecosystem is really the area that I think we should focus on as we think about the ecosystem effects. What was very pleasing for us is to see the build-out in particularly of the merchant network. And we've seen the acceleration of the informal merchant acquisition and the rollout of self onboarding with our open API framework. And if you look at the transaction value column, I think you will also see there that we had 45 million API transactions from partners in 2020 moving to 155 million API transactions from over 1,000 partners, scaling and building out the effects of our fintech ecosystem. In the year, we also made progress with the structural separation of the business. And I was trying to pause and talk to the structural separation so that all investors understand what we mean by it and what we don't mean by it. The structural separation of the business has been about creating the accounting separation of the fintech business out of the GSM business. And with that, creating its own set of financials, its own set of commercial agreements with the GSM business because both businesses still have a lot of value that depends on each other's business. You see, for example, airtime sold through MoMo actually is increasing. So that process of accounting separation, legal structure set up. And then the contracting has been a process that's been ongoing, and we're very well advanced with that process and we anticipate we'll complete that process end of quarter 2 this year. And ideally, we complete that with the PSB announcement having been made, and obviously, that's subject to the regulator. When we complete that process is when we go into the second part of our process of setting up the fintech businesses separately. And that is when we are going to be seeking partners who help us accelerate the business, particularly in the areas such as merchant acquiring and the acceleration of that part of our business. So that is the part that we've said that we would focus in the second half of the year and once we've created the structural separation. So at the end of this year, we want to have completed 2 aspects of the fintech, the completion of structural separation by the first half and then bringing onboarding strategic partners to help us accelerate the business, and we'll report on the progress of that as we go through our H1 results. If I move to the portfolio transformation, just a few callouts, good progress we've made around in terms of IHS being listed in New York. We're obviously disappointed with the current valuation of the business. And if that valuation persists, we wouldn't be selling down as per the right that we have at the next window. There's an April window for current existing shareholders to sell down. But given the state of the balance sheet, we are under no pressure to sell at values that we think materially undervalued the business. But it does, the listing has created a liquidity platform that we can tap into in future. And obviously, we have the next 3 years plus that we can think about the monetization of the asset. We've made good progress on the SA Tower transaction, and we are awaiting competition commission approval on that. And net proceeds on a successful transaction would be about $5.5 billion. And then the other callout I would have when the portfolio transformation has really been about the Nigeria sell down. We saw down 3% of the group holding in Nigeria and net proceeds of that is approximately about ZAR 3.6 billion and we anticipate that, that will flow in the first half of this year. In terms of simplifying the portfolio and driving our Pan-African Focus, progress made in Yemen and Syria. Afghanistan, we continue to evaluate options. The events post August last year, complicated our ability to engage with some of the parties that we're talking to, but we are continuing discussions and we'll be able to update investors on our progress there thereof. We've said we wanted to exit in an orderly manner, and that is something that we will obviously be focused on. Then on creating shared value. I think investors are now familiar with our framework in terms of ESG responsibilities, a few points of call out here. Firstly, we're making good progress on greenhouse emissions reductions and 16% on Scope 1 and 2. We are rebasing Scope 3. And so for last year, we are reporting on the Scope 1 and 2. But for Scope 1, 2 and 3, we're still committing to our reduction levels of 47% by 2030. And so good progress there. Rural broadband great progress made in the year, 83% broadband coverage. That is access to at least the 3G technology, and we have a target of 95%. So good progress in the year. And then our diversity and inclusion measure is women in senior management, in the management layers, and we made a 1% improvement from 38% in prior year to 39%, still a way to go to get to the 50% but have got very clear plans at the group and in all the operations to get there. One of the important things, and we took feedback from investors is about how do we link the ESG agenda to executive remuneration. And as of 2022, the LTI has a 25 percentage linkage to ESG, the 3-year LTI payout structure. And it has 3 components, which is net zero, diversity and inclusion and then on the rural broadband. And many thanks to our colleagues for the great progress that we had and improvements in our ratings in the year past. Then finally, just to talk about some of the numbers before I hand over to Tsholo to take you in more detail. Again, on our old guidance structure, pretty much green on the service revenue. We outperformed on service revenue. Fintech is on track. This movement to 9.3% is actually above what our expectation was. We spoke about holdco leverage and also spoke about returns. So good progress in delivering on the guidance that we committed to investors. So with that, let me pass on to Tsholo, and then I'll come back with a look forward view after Tsholo presents.

Thank you very much, Ralph. A very good afternoon to everyone joining us in person virtually on various platforms today and especially hello to all our MTNers across our markets who are joining us for these results. I'm going to take you through our very pleasing results, the financial performance for 2021, and I will cover the following: Firstly, what are the material items that have impacted on our reported results; I will then take you through some of the sale and features on the income statement; and then share with you some of the performance of our 2 largest markets particularly South Africa and Nigeria; I will then move on to the key line items specifically in a bit more detail on the income statement; and lastly, share with you how we've been able to generate strong cash, manage the balance sheet as well as improved returns. Now if we start with the material impact on our reported results, you will notice that from a currency movement perspective, the stronger rand on average exchange rate basis resulted in group service revenue being impacted negatively by 17 percentage points relative to constant currency. The rand was also stronger against the Nigeria naira by about 18.5%. The rand also closed weaker against the dollar impacting balance sheet items but also impacting on holdco leverage negatively. We also recorded a ForEx losses of about ZAR 2.6 billion during the year, largely due to currency devaluation in various markets relative to the stronger rand. We also had some significant one-off items. Some of these we reported during our interims. We had a gain on disposal of peaks of ZAR 1.2 billion, and we recorded a loss on recognition of MTN as Syria when we lost control at the beginning of the year, a loss of ZAR 4.7 billion. Yemen, as Ralph indicated, we have exited has been assessed at [indiscernible], and we have recognized some impairments on goodwill as well as noncurrent assets totaling about ZAR 1.2 billion. We also made some COVID donations during the year of ZAR 486 million with ZAR 383 million to the AU for COVID vaccines as well as ZAR 103 million from MTN Nigeria to a coalition against COVID. We also provided for a multiyear arbitration settlement during the year, amounting to ZAR 536 million. All these significant one-off items have had an impact on our expenses EBITDA as well as headline earnings per share. Some of the items that are key to note is also the significant appreciation in the group share price, which has impacted our staff cost significantly due to the share-based payments of roughly about ZAR 1.2 billion, resulting in a reduction in EBITDA margins of 0.6 percentage points. We also upstreamed a total of ZAR 18.4 billion from our operations with a total of about ZAR 7.8 billion coming from Nigeria dividend upstreaming. An additional ZAR 430 million was also upstream from Nigeria post December 2021. So the progress with upstreaming has been -- has positively impacted our holdco leverage, which I will share with you later. If we then move on to the income statement, you will notice that on your left-hand side, you have the year-on-year movement on key line items on an IFRS reported basis. And on the right, you see the movement in constant currency. As we said, we delivered a good solid service revenue growth of about 18.3%, about ZAR 171 billion, which is ahead of our medium-term target in constant currency. And this was really largely driven by double-digit growth that we saw in Nigeria and Ghana. We also saw good pleasing results from South Africa with service revenue of about 6.5%, in line with the medium-term target of between 4% to 6%, compared to a growth of 1.6% in FY 2022. And on an IFRS basis, if we look at EBITDA, which decreased by 6.3% but in constant currency before one-off items, as we mentioned earlier, EBITDA increased by 23.7%, and this was really driven by healthy operational results across all markets. The 7.6% increase that we see in depreciation, amortization and goodwill impairment was largely driven by increased capital expenditure additions that we did in prior periods. But also, as I mentioned earlier, the goodwill impairment, which we recorded in the period for Yemen. Net finance cost, you will realize that it decreased by 12.5% in constant currency, largely due to a reduction of ZAR 2 billion year-on-year in ForEx losses, but also due to a lower interest rate environment, and there is a significant reduction in net debt, which I will share with you later. The share of results of associates, as you can see, increased by 80% to ZAR 2 billion, and this was driven primarily by the strong underlying performance from Irancell, which is an associate. Income tax expenses grew by about 25%, largely due to withholding taxes as well as an increase in nondeductible expenses in other markets. The group effective tax rate, however, was 41%. And really, this was impacted by nondeductible losses, particularly the derecognition of MTN Syria that I mentioned earlier. On a normalizes, we saw group effective tax rate being at 35%, which is really in line with our target of mid- to high cities. Adjusted earnings per share grew by 26.6% in the period, and this was impacted positively by some of the adjustment on nonoperational items, totaling ZAR 1.23 per share that I mentioned earlier. So if we unpack our group service revenue in a bit more detail, you will see that we saw pleasing revenue growth across all areas with voice, data and fintech being the main drivers of the growth. You will see that voice revenue grew by 5.2%, supported by growth in voice traffic. The performance was also supported by our well-executed customer service -- customer value management initiatives as well as segmented customer propositions. We saw stellar growth in data revenue, which grew by 36.5% underpinned by a search in data as you saw in Ralph's Slide, 53% growth about 6.4 gigabytes per user per month and active subscriber growth of 11 million to now close the year at 122 million subscribers. Digital revenue also increased by almost 23%, and this was supported by an improved uptake in our digital offerings in our markets. We saw good increase in service revenue from fintech driven by a base growth of about 10.4% in our active MoMo users to now 56.8 million. Wholesale revenue also grew by about 49.7 million on the back of a strong national roaming in MTN SA, and I'll take you through that later on. Other revenue also included ICT and enterprise connectivity, which grew by 14.5% benefiting from increased data users on the back of strong performance in fixed access data, cloud security and hosting services, particularly from MTN South Africa and some turnaround in some of the SME segments across our market. Now let us look at fintech in a bit more detail. You will have seen the operational performance, and this is how it translates into the financials. As you will see, fintech now contributes 9.3% to group as service revenue rose by 30.9% in the period as we continue to scale up our mobile financial services. The bulk of the fintech revenue, as you see on the pie chart, mainly came from -- withdrawals at 57% of the total revenue. EBITDA growth was 31.5%, in line with solid revenue growth, which, on a pro forma basis, EBITDA margins at 46.7%. We do expect that the EBITDA margins will rebase over time as the growth picks up and we start allocating the full cost associated with running the business once we have structurally separated the fintech business. But a key metric here to look at is actually our free cash flow, which was strong at 29.8%, which is really important given the economics of the business, which is really capital light. And you will notice that we spent ZAR 200 million in capital expenditure towards the fintech business. So if we move on to the financial performance then of our 2 major operations, and I will start with South Africa. The slide illustrates the trends that we saw in service revenue, expenses, EBITDA as well as capital expenditure. You will notice that MTN SA delivered solid performance overall with service revenue of 6.5% enabled through commercial and operational execution across all business units. If you look at the various revenue bars, you will see that revenue -- voice revenue was actually down by 5.2%. This was driven mainly by consumer prepaid voice where the push to for bundle usage is diluting out-of-bundle usage. The prepaid in bundle revenue increased but was not sufficient to offset the reduction that we saw in out-of-bundle. The decline, however, was also due to the impact of a 4.6% decline in prepaid users as customers migrate to voice over IP as well as data substitution. We saw an increase of 13% in data revenues, supported by 58% growth in data traffic and the growth in active subscribers of 12.5%, now totaling 17.7 million subscribers. Core digital grew by 19.9%, benefiting from a number of growth initiatives, including billing optimization as well as other products, new products that we implemented. Fintech revenue started to pick up, and it comprised of airtime lending fees, which grew by about 3.5% and this was also driven by an increase in extra time lending fees with MoMo as I indicated later, we start to see picking up in South Africa. Wholesale revenue grew by 36%, and this was driven mainly by a notable improvement in Cell C. MTN SA recorded 2.7 billion brand in roaming revenue, particularly from Cell C, which was an increase of 33.9%. We continue to account for Cell C on a cash basis, and we had unrecognized revenue of about ZAR 236 million at the end of the period. If we look at the expenses from MTS SA in a bit more detail, you will see that cost of sales only grew by 3.5%, which was way below the service revenue growth. The main increase was in handsets and device costs as well as commission expenses of a lower base due to COVID impacts in 2020. The device cost of sales was higher by about 5.6%, and this was largely due to the LTE device distribution during the period with an increase of about 24% in LTE devices sold. MTN SA has been able to improve its gross margins through the optimization of device subsidies, which contributed about 0.5 percentage points to the EBITDA margins. Commission expenses were up about 6.4% due to increases in device distributions and activations during the year. If we look at operating expenses, it grew significantly by 13.1% year-on-year, but this was mainly impacted by staff costs that grew by 43% as a result of the increase in the share-based payments, as I indicated earlier because of our increase in our share price. If we exclude this item, staff costs in South Africa would have only grown by 1.1%. Other drivers of the OpEx increase were due to network operating expenses, which increased by almost 5%, predominantly due to rand utilities as well as maintenance. And this was really driven by high electricity tariffs of about 15% during the period. We saw MTN therefore, achieving an EBITDA growth of 6.8% with an EBITDA margin of 38.9%. The EBITDA margin of 38.9% was actually impacted by share-based payments. If we exclude that, we would have seen a margin of 41.4% in South Africa, which is really within the guidance that we've always given of between 39% and 42%. MTN spent a total of ZAR 10.4 billion, and this includes the -- this is on an IFRS 16 basis with continued investment in 3G as well as 4G and a rollout of 5G sites of about 843 during the year. And this resulted in CapEx intensity on an IFRS 16 basis of 21.4%. If we look at it from an IAS 17 perspective, CapEx intensity was at 18.8% this year. If we look at all the segments then across South Africa, encouragingly, you will see that the consumer prepaid business was up to 2.1% during the year, slowing down in the fourth quarter. The business' performance, however, was supported by strong data revenue. However, this was really offset by pressure from voice, as I indicated earlier, voice substitution, challenging macroeconomic conditions as well as an increased split of consumer wallet share that we're seeing. The consumer postpaid business delivered service revenue growth of 4.5% in a highly competitive market. The focus on subscriber additions was driven by channel expansion, well-managed chain and a consistent drive for SIM-only as well as data rich packages, which contributed to this growth. Enterprise service revenue remained on a positive trajectory with growth of 16.8%, now recording growth for more than 9 consecutive quarters. The business continues to grow through fixed data at the strengthening the SME CVM initiatives as well as sustained recovery of the ICT business. If we briefly touch on Nigeria, and I will only just touch briefly because you would have seen the results of Nigeria at the end of January. MTN Nigeria, as you can see, delivered double-digit service revenue growth of 23% in constant currency, and this was mainly driven by voice data as well as fintech. Voice revenue grew by 8% due to higher usage in active SIM base with a 10% growth in minutes of use. We saw a solid data revenue growth of 55% and [indiscernible] by increased usage from the existing base with impressive data traffic growth of 85%, supported by the acceleration of 4G rollout and enhanced network capacity. Fintech revenue also had commendable growth of 57% due to sustained growth in the use of extra time and broader fintech services by customers. In terms of expenses, you will see that we saw an increase of 17.5%. Cost of sales grew by higher -- grew due to higher commissions and distribution costs in line with the revenue growth, which were up 14% and regulatory fees went up by 23%, also in line with the revenue growth that we are seeing. We saw an increase of 21.7% in operational expenditure due to higher network costs from accelerated site rollout, but also due to the devaluation of the naira and CPI impacts on the current PTS rentals. MTN Nigeria also continues to implement expense efficiencies and aimed at driving margin expansion in the near term, thus improving the EBITDA margin to 53% by 2 percentage points. Total capital expenditure in MTN Nigeria was about ZAR 14.9 billion for the period. And as I indicated, due to the accelerated rollout of 3G and 4G sites resulting in CapEx intensity 24.8%. Now if we turn to group expenses, which were well managed during the period, you will notice that cost of sales was up 10% largely driven by an increase in commissions and distribution costs, as I indicated, mainly in Ghana, SA and Nigeria as well as an increase in handsets at costs in South Africa of a smaller base. The increase in commissions and distribution was mainly driven by the strong growth in our MoMo business and increased activations compared to 2020. Operating expenses increased by 15.9%, and this was led by higher network and as we continue to roll out size across all our markets. The IFRS charge for the share based payment also would have had an impact of -- on staff costs, as I indicated earlier. We continue to see a relentless focus on cost management across all our markets despite the growing business with our expense efficiency program continued to drive margin expansion. In the year, we realized ZAR 3.7 billion worth of efficiencies with the largest savings coming from MTN SA as well as Nigeria. The savings in OpEx were largely realized in the network area environment. We continue to target savings in network and IT costs. Sales and distribution as well as energy efficiency going forward as we continue to -- as we anticipate that this will contribute significantly to targeted savings of a further ZAR 5 billion over the -- over the planning period of a 2020 base. So if you look at the EBITDA, then you can see that the drivers of group EBITDA both in absolute terms as well as margins. Overall, group EBITDA on core operations was up 20.3% in constant currency, as I indicated earlier, before one-off items. The growth was really broad-based against all the performance from all the markets, in particular, Nigeria, South Africa, the SEA region as well as the WECA region. At an operational level, the EBITDA margin expanded by 2 percentage points with positive contribution from all the markets supported by solid service revenue growth as well as relentless focus on cost. So the group reported EBITDA margin declined by 4.1% on a reported basis and this was mainly impacted by the derecognition of MTN Syria and as well as the losses that are indicated on impairment of Yemen. Moving on to the adjusted headline earnings per share analysis. This table provides a reconciliation of our attributable earnings per share through to adjusted headline earnings per share, and this gives more visibility to our strong underlying performance during the year. The difference between attributable earnings per share, which declined by 19.3% and basic headline earnings per share, which grew by 31.8% is due to the significant one-off transactions that I mentioned earlier in Syria, losses, Yemen impairments and some gains on disposal of investments and acquisition of a subsidiary. That's resulting in basic headline earnings per share of $0.97. A further adjustment to reported headline earnings for ForEx losses, COVID donations and arbitration settlement resulted in adjusted HEPS of [ 1,110 ] per share, giving an increase of 26.6% year-on-year, which is an indication of positive operational earnings momentum. If we look at capital expenditure, as we indicated, we remain focused on building the largest and most valuable platforms and increasing the capacity of our network. We capitalized ZAR 32.7 billion during the year across all markets which is higher than our original guidance to the market, achieving a CapEx intensity of 18%. We accelerated the rollout of 3G and 4G sites in support of the growth that we are seeing, mainly in Nigeria, Ghana as well as Uganda. We rolled out a total of 3,566 sites, which was 90% more than we planned and about 9,158 4G sites, which is about 36% more than we planned. So if you look at -- on the pie chart, you would realize that network expansion, which is the RAN transmission, the core network and as well as site infrastructure accounted for a total of about 76% of the total capital expenditure. Investments in IT modernization, including the development of products and tools to support our growing platform business accounted for about 24% of the CapEx. As I indicated in MTN SA, they continue to invest in the 5G network rollout with about 843 sites that were live during the period. So our group CapEx guidance for 2022 will be ZAR 34.4 billion, and we expect the intensity to reduce over the medium term as the business continue to grow, guided by our disciplined capital allocation framework with group CapEx intensity expected to be in the range of 18% to 15%. If we look at our core cash flows, you will notice that operating free cash flow before the spectrum as well as license acquisitions grew by 35%, and this was due to strong cash generation from operations to ZAR 67.3 billion, which was an increase of 15%, really driven by solid operational performance across the markets. You will see that our license renewals and spectrum acquisitions, which was mainly from Nigeria 5G spectrum acquisition amounted to ZAR 6.2 billion in the year. We also saw an improvement in our working capital of ZAR 4 billion, and this was largely due to the timing effects relating to payment of vendors and suppliers, mainly in Nigeria. Working capital will remain a key focus area for us as we continue our efforts to preserve cash during these challenging trading conditions. You will also see that the key cash outflows -- we paid a total of ZAR 22 billion in taxes as well as interest, net interest paid on borrowings. So as well as interest and this excluded the CapEx, excluding lease payments of about ZAR 29 billion. The movement in financing activities, as we can see, was ZAR 24 billion, and these were largely driven by net repayment of debt and settlement of lease obligations of about ZAR 6 billion. During the year, we actually settled ZAR 44 billion in debt, which was offset by new borrowings of about 24. The ZAR 44 billion also included some refinancing. So this was also positively impacted by the proceeds from the Uganda listing of ZAR 2.3 billion. Other investments of ZAR 4.3 billion were driven mainly by proceeds from disposal of investment in BICS of about ZAR 1.8 billion, realization of fixed deposits at head office of about ZAR 1.4 billion and from Nigeria of about ZAR 3.5 billion. And these were offset by movements in restricted cash of about ZAR 1.5 billion. mainly in Nigeria relating to letters of credit. If you look at the holdco net debt, we continue to improve the strength of our balance sheet with progress in cash upstreaming and the faster deleveraging of the holdco net debt. On the top left-hand side, you will notice that the group progressed well over the last 2 years, reducing holdco debt from ZAR 55 billion in 2019 to now ZAR 30 billion. The group leverage improved 0.4x from 0.8x in 2020. This was supported by strong cash generation from operations, while the holdco leverage also improved to 1x from 2.2x in 2020. Positively impacted by the progress that we've made on cash upstreaming as well as a settlement of borrowings. We've also made improvement in our debt mix as we also said, we'd like to make sure that we have a mix of 60% rand debt relative to non-rand debt. And we continue to reduce our exposure to U.S. dollar debt and improve the funding mix at holdco level. If you recall, we also redeemed a 2020 Eurobond of about $500 million, which was due to mature in February this year. During the year, we also utilized the proceeds from our ARP, which is our asset realization program and cash upstream from operations to be able to repay our debt in holdco. And this comprised about ZAR 12.6 billion in U.S. denominated debt as well as about ZAR 8 billion in rand-denominated debt. We also concluded about ZAR 5.6 billion in debt through a combination of local debt capital market issuances as well as bank facilities. This allowed us to extend and maintain a smooth maturity profile, as you can see on the right-hand side as well as enable us to improve our cost of funding and further improve the holdco debt mix going forward. Looking at the statement of financial performance position, sorry, I just wanted to highlight some of the major movements on the balance sheet. The increase in intangible assets and goodwill was largely due to the acquisition of the 5G spectrum in Nigeria. Included in other noncurrent assets is our investment in IHS, which we fair valued at about ZAR 19 billion during the period. As Ralph indicated, the devaluation of the IHS was largely due to the negative share price movement following the IPO listing at the New York Stock Exchange. The MoMo deposits and payables amounted to ZAR 39 billion, and this was due to increased cash in deposits were in line with the growth in our MoMo business. And you will see that the increase in our cash and cash equivalents resulted from increased cash generated from operations across the group. Noncurrent asset held for sale comprises the MTN SA tower sale and leaseback transaction. The interest-bearing liabilities, as I indicated, decreased which was a 16% decrease and mainly as a result of the settlement of debt. Other liabilities increased by 16%, and this is where the growth is mainly attributable to accrued expenses mainly from Nigeria as a result of unsettled foreign denominated liabilities. Noncurrent liabilities held for sale is in line with the noncurrent assets held for sale that are indicated, and these are lease liabilities relating to MTN SA tower sales. Now if I can conclude my presentation, let us look at the progress we've made on the return on equity. We see an increase from 17% in December last year to 19.6%, really driven by operational earnings growth from the consolidated subsidiaries. The notable drag on the ROE were higher group effective tax, as I indicated at 41%, and the movement in noncontrolling interest driven mainly by the Rwanda as well as Uganda reduction in shareholding and the FCTR, which are foreign currency translation reserves as a result of the weaker rand on the reported results. We are pleased with the ROE evolution, which is really just shy of our medium-term target of over 20%. And ladies and gentlemen, I will conclude my presentation here and hand over to Ralph.

Thanks very much, Tsholo, for taking us through a very comprehensive view of our financial performance, both at the group level and looking at our major subsidiaries. I think as investors, you all appreciate, we're a large group, but I trust that you are more familiar with the performance after Tsholo's presentation. Just a couple of points before we close. I'm just looking ahead. Obviously, we are a couple of months into 2022, and just the context that we see in our operating environment would be as follows. I think we will continue to see a sluggish economic performance in many of our major markets in South Africa. I think South Africa did a bounce back in GDP growth last year of the low base of 2020, but constrained by the unemployment issues and issues related to structural reforms coming forward. I think we are strongly encouraged in South Africa that as we speak right now, we are in the middle of the spectrum auction process, which the main auction proceeds tomorrow. But structural reforms overall are much needed in South Africa to get GDP growth rates. Nigeria, I think it's anticipated that, again, we will see a sluggish growth. But the thing I would say here is that, I mean, these were a pretty similar kind of economic outlook positions as last year and thus is MTN notwithstanding the COVID effects and the sluggish economic outlook, we're able to be resilient and to be able to take advantage of the opportunity that we see with mobile and the fintech acceleration that I pointed earlier on. So the macro context, we see as potentially challenging through the year ahead, but the business has resilient strong networks, strong brand and economies of scale that allow us to -- with stand shock if we see such as the year progresses ahead. So a similar kind of macro context as per 2021. If we look ahead, specifically to MTN and what are our priorities, our priorities largely stays the same. We are focusing on looking to accelerate the growth that we see in both South Africa and in Nigeria. South Africa as I said, we would be very pleased that the business is growing within the 4% to 6% range and getting the EBITDA margin in the 39% to 42% range. As Tsholo said, if you took out the IFRS 2 charge, actually, South Africa was a business that was growing at 41% in terms of the EBITDA margin. We will see pressure in consumer prepaid. We do have CVM initiatives that we believe will help us stabilize the pressure that we saw in the consumer prepaid, particularly quarter 3 and 4, and that's pretty much across the SA market. But the South African business, we believe, has got -- is well invested in and will be resilient to deliver good growth in the year ahead. Nigeria, we're seeing accelerating growth. Hence, we upgraded the guidance there. The rollout on 4G is we've been able to monetize that. And having procured the 5G spectrum, it was a plan to build out on 5G services, both for the home and business individuals and businesses and all be a story that we'll be talking to you about the progress we've made at the half year. As I mentioned, on fintech, 2 big things: complete the structural separation, the accounting, the intercompany agreements, the full setup of group fintech and ideally, the PSB was within that construct. That's a first step. And then secure strategic partners to support the acceleration of the group fintech. We'd always position that in some of the platforms, we will seek partners to help accelerate the growth, and to better manage those businesses in the form of those platforms. So quite a lot of focus and attention from us as a management team around that. Obviously, we've delivered ZAR 15 billion of the 25 on the ARP. We still got some way to go. We are looking forward to progressing the Nigeria, a sell-down Series 2 in the course of this year. And obviously, we would want to see the Series 1 cash come up, but focus on executing on the localizations remains a focus for us. And then the exit of Afghanistan done orderly is also a priority for us. I mean the networks remain the bedrock and foundation of the company. So we're putting a full investment profile of ZAR 34 billion, we will be within the CapEx intensity range that Tsholo of spoke about 18% to 15% over time. So capital well invested and efficiently invested to deliver the returns. Obviously, we still have a set of complex litigations in the Middle East, in Afghanistan that we're dealing with and Turkcell. So we'll be working around those. And then finally, our ESG initiatives and priorities to bed those down and actually take on progress. So this is the list of our priorities, which we will report back on progress at the half year. Suffice to say that these parties are pretty much similar to the ones we had in prior years. So trying to drive momentum and doing the same things that we've done not throwing our strategy around too much. Just in conclusion, I mean, I just wanted to leave you as audience, investors and stakeholders with 6 key points. The first is that in the year under review, we've seen a very strong operational and sustained commercial momentum. That translates into the base growth that we've seen and into the financials, including return improvements, both at an equity level as well as cash flow level. The business now has a lot of financial flexibility if you look at what the holdco leverages. But we are maintaining the liquidity headroom to be able to take advantage of opportunities to invest in growth, but also to be able to withstand shock in this current kind of geopolitical context where there's a lot of uncertainty still. But we are pleased with the shifts in the debt mix as well as the fact that we now have predominantly ZAR debt at the center. Progress in ARP and the portfolio transformation has been made in the year. We still have quite a bit to do. And as I mentioned, the focus on fintech and growing that ecosystem out is something that we're very focused on. Creating shared value of driving further our ESG work as well as the localization. This is something that we've been focused on, and we're very happy with the progress. And the final point linked to my earlier statements about the enhanced guidances, we are seeing growth, and we think that, that growth is structural. We are going to invest into that growth and deliver improving returns for shareholders. Hence, we are enhancing the guidance from FY 2022 as communicated at the start of my presentation. And just to remind investors, what we see ourselves as MTN, we see ourselves as a compelling Africa growth story, we see tremendous amounts of growth, both in data and fintech and more broadly across the company. So we believe that the investment case for MTN remains intact, a unique company that is able to deliver growth on the digital and financial acceleration that we've seen across our continent. So with that, I just want to thank you all for listening intently to myself and Tsholo for over an hour. And we would just invite Thato to manage the Q&A that you may have. Thato. I'll ask Tsholo to join me on the stage.

Thanks very much, Ralph, and Tsholo for the presentation. And maybe we'll just start the questions with your final point there on your 6 points. And it's really just some clarity around the growth guidance. So you've upgraded your group revenue growth guidance. How much is that due to the Nigeria outlook versus the other markets? So maybe that's the first question. And then the second question on Nigeria. Can you give us your assessment of the availability of USD in the Nigerian market and how it's impacting on repatriation? And maybe you can just add in the average rate that cash was upstream from Nigeria?

The average rate, I'll leave it to Tsholo, she will remember all those numbers. But I mean, on the first question really around the outlook Nigeria is obviously material it's 1/3 of the group. So we have enhanced guidance and all things stay the same, you would enhance guidance for the group. But we did enhance guidance for Ghana as well. And as I said, we're seeing structural trends throughout our portfolio of rising demand for data and fintech services. So it's not only Nigeria. It is a material point. Ghana is another material point. But we're seeing a broad-based. The market that we think that our guidance remains largely intact, will be South Africa. And that's why we have not touched South Africa. Think of it as the 4% to 6%. I don't anticipate that we'll be above 6 this year to be clear for investors, but we will be within the corridor of the 4% to 6% in terms of South Africa. Coming to the point of liquidity, hard currency liquidity. Nigeria, we had -- we took the dollars as and when we were able to get them under the CBN structures that we are being able to repatriate. I would argue that nothing has changed materially from the half year. Our team go to the window and they get $10 million or $15 million. That's how we've been able to get it. And post the year-end. So last year, we had 7.8 billion coming out and post the year to 0.5 billion. We anticipate that series 1, we should be able to clear that outside of any shops, we should be able to clear that in the first half of this year because we want to commit to series 2 in Nigeria only when we have money out from series 1, we wouldn't be committing to series 2 and having more cash trapped in Nigeria. So yes, we're still able to get dollars. And obviously, the team are getting dollars and using LCs for the CapEx program. So on the average dollar...

Yes, we externalized at an average of about 480 and I think very important to understand that, yes, there is a premium and the size of the externalization is also a factor. If you think about the fact that we've been able to upstream ZAR 7.8 billion including about 430 post December. It is quite a large size. So we're quite happy that we've been able to clear all the outstanding dividends from 2019.

Thanks, Ralph and Tsholo. And then maybe just the next 2 questions to do with fintech. What for might fintech strategic partnerships look like? And on what criteria do you assess partners? That's the first question. And then the second 1 point of clarity, can you elaborate on the nature of the fintech revenues and in South Africa versus your other main markets, if there is indeed such a difference?

Yes. I mean on the -- on the partnership point, as I mentioned, what we're looking for is strategic partners that can help us accelerate. Now what you've got to think about, we have 5 verticals within the group fintech and each of them potentially acquire different partners to drive the acceleration. We did show in the slide some of the partnerships that we've made to drive the acceleration. For example, we said we think we can grow faster by partnering Sanlam on insurtech. So subject to regulatory approvals, they are a strategic partner who can help accelerate. We're not saying that there will be a strategic partner necessarily in the group fintech, but you need to think of the ecosystem of the verticals and companies that are able to. Because we are very focused on strategic partners to accept. We're not looking for financial investment, to be clear. We have the CapEx to drive our own growth. But we believe partnership is the right model to drive those. So a simple way to think about the strategic partners that we are looking for this year are the ones that are able to help us grow the verticals or a couple of the verticals faster than we would ourselves. That's the way to think about it. And any capital that comes with that process actually is a secondary consideration. The primary consideration is a partnership model to scale the verticals. I mean, obviously, South Africa was a very different fintech market in South Africa. Obviously, we need to work with bank partners. We don't have e-license regimes or PSB type regimes. So ours is to work with bank partners to focus actually on what we call a proposition of better and safer than cash. So we're not trying to compete with the banks in South Africa. We're actually trying to deliver financial inclusion in largely in formal markets. So the business is right now very nascent. And I think it's a business that we think over the medium term, can have monthly active users somewhere between 4 million to 5 million. So it's very nascent right now but it will add to the portfolio over time. So South Africa is -- it's a very different proposition to what we have like in Ghana and potentially what we're going to have with the PSB subject to regulatory approvals.

And then maybe 2 questions on Iran. What -- can you please comment on what drove the performance in Iran, and your expectations for the coming year or 2? First question. And then the second 1 is, how much do you have stuck there in terms of receivables? I think we disclosed that at $3.4 billion. But what is your strategy in terms of how you look about -- look at repatriating that money?

Yes. I mean maybe to start with the second question last. I mean, obviously, with the sanctions regime being in place for our own sanctions compliance and management of sanctions risk, we've left that money trapped in Iran and actually provided as loans to the company. So if the JCPOA deal is struck obviously changes the situation where we would be able to repatriate capital. But until such time that cash and the dividends that were declared in are remaining trapped within that environment. So any movement on the nuclear deal and incorporation of Iran into the global system will obviously be positive. In terms of the performance of the business, I think the core connectivity business remains a market leader, particularly on data services. So we've been investing in expanding that network actually, we have more traffic growing through into that business than in Nigeria, as an example. So it's a very big and strong network supporting 50 million subscribers. So the core connectivity business is growing strongly. What is actually pleasing in Iran actually is the Snapp business, the so-called Uber of Iran. I mean they've got 3 million daily rides in Snapp. Snapp foods is delivering 250,000 meals per day, Snapp delivery, another 200,000 plus a day. So the ecosystem effect of Snapp business, is actually very impressive. But you know Iran is trapped into this particular structure right now where because of the JCPOA, it is kind of a ring-fenced market. But very pleasing growth in that business on the back of its own network expansion, 4G services. And the smartphone penetration in that market is probably across all our markets leading. I mean, it's well over 80% smartphone penetration within that market. So I mean, the business has been well invested and remains very strong.

Thanks, Ralph. A couple of questions for Tsholo. Is the first 1 on CapEx. Is the head office CapEx guidance increase to fund fintech growth? And if so, should we expect this to rise further in the coming years? First question. And then the second 1 is just around U.S. dollar debt deleveraging. Do you intend to repay, I think you did touch on it, do you intend to repay bonds as they mature or possibly through tender?

So maybe starting with that one. I mean our intention is to faster deleverage the balance sheet, as we indicated. So we would like to see the 2 remaining Eurobonds 2024 and 2026. Reducing to a de minimis balance. So it will be subject to market conditions. We will obviously assess how the market reacts, depending on what we have, and we intend to start the process this year based on market conditions. So I think that's our focus in terms of the Eurobond and then on the -- the other question was on, sorry, I think I'm the first one.

So the other question was on CapEx, the increase in head office CapEx?

Yes. what it has to do with fintech. No. I mean, obviously, at this point in time, fintech has not been removed completely. But the -- as you have seen, the fintech business CapEx is currently only about ZAR 200 million. And as we structurally separated, fintech business will be a separate entity, which is the work that we're doing now. And we -- you will have seen that it's grown from $80 million last year to $200 million. So it's essentially within the 24% that I spoke about earlier on in terms of 24% of the total capital expenditure.

Thanks, Tsholo. Question on South Africa. Could you kindly provide some color I think this is for Europe on the strong performance in EBU and SA? Are you making any progress on gaining a greater share of the RT15 tender?

Yes. I mean to Wanda and his team, the whole team and South Africa team, I mean tremendous performance. But this performance we're seeing now as is genesis multiyears, where we did reposition the business from the ICT-centric actually to be connectivity-centric with ICT on top, and that's the work that Wanda and the team have done very well over the last couple of years. So we have been gaining share in the market outside of the firstly, in the private sector, the SME space and in the large multinationals, we've been able to get share there. And the RT15 contract came into effect last year, and we think we're getting a reasonable share. So that is supporting the growth, but it's not only driven by the RT15, it has to do with the multiyear work that we've been seeing. I think now I even forget whether it is 12 -- 9 consecutive quarters of strong growth from that business, but it was in degrowth. So it's sustained performance, getting the proposition right and for sure, the RT15 is helping, but it's not the only driver of growth.

Thanks Ralph. I'm just going to take a moment Ralph to turn around to see if any of our in person guests they have any questions is by show of hands or let -- for too long -- just wait for a roaming mic if you will.

It's the first time we've had shareholders in the room for 2 years. Exciting, exciting.

I know it's good to see everyone in person again. Thanks [ Steven ] and congrats on a good set of results. Can you just explain the ZAR 3 dividend how -- I mean, I know the minimum guidance was ZAR 2.60, how did you get to ZAR 3 then? And then how is the ZAR 3 that you calculate? How should we think about it?

Yes. Maybe just to -- and lot top and tail, I mean, as you say, we guided ZAR 2.60 because we thought that in reasonable stress scenario, and last year remember there were 3 stressors we were concerned about. One is COVID uncertainties. We have the delta variant then, and we weren't sure how that would impact the markets. The second uncertainty that we said was cash upstreaming from Nigeria. The third is progress with ARP. I think both -- all 3 of those uncertainties have diminished the, but are not completely disappeared within. We don't know where the next variant will come from and what impact it will have. COVID is not over yet because if you look at Africa, you only got 11% vaccination rates. So we have to assume that we can be surprised on the COVID side of markets in a potential closes. So we need to have the buffer for that. The second point is, obviously, cash upstreaming, we made good progress. But as I mentioned, even into the beginning of this year, we're seeing a similar profile where there isn't kind of the tapes that are opened on dollar liquidity. So we need also to be circumspect around that. And then obviously, the ARP is a function of how we're able to execute, particularly around IHS share. IHS price, very depressed. We're not sellers at the next windows. And if it stays depressed for another year, we'll remain with our shareholding and not sell. So on the basis of those uncertainties and the cash that we have with the group and having run reasonable shock scenarios, the $0.300 made -- the $0.300 per share made change to us, number one. And the $0.330, again, we were able to do shocks scenarios that says, we back ourselves to be able to deliver this in reasonable shock scenarios. But I want to come back to the point that I started with is how best do we allocate capital that the shareholders have given us. As we look at capital allocation and priorities, the best investment for a dollar of capital that we believe as the MTN Group is to invest it in the growth that we're seeing that is structurally high, we're able to invest that and get a better return. The second batting order, and we need to make sure that we have resource for that is to Tsholo's point, we want to really improve the kind of financial risk profile of the group balance sheet, the dollar debt that sits there. It is there, but Tsholo now would like to have 1 of it. So we put that as priority #2 from a capital allocation. So when we play the risk scenarios of what can and may not happen, as well as where should we be deploying capital, the $0.300 and $0.330 kind of made sense to us and kind of reasonable shocks stress scenarios, we will be able to deliver that. And that's why we say it's a minimum of. And so if we ever have a super fantastic year of cash upstreaming and all of that, we've committed that the last capital allocation priority, we would invoke that, which is our willingness to pay specials. But the uncertainties are still with us and the world is not a super certain place at the moment, and we must run our business responsibly. So we think the 3 and the 330 absolutely makes sense in current kind of market conditions. Tsholo?

I think you've covered everything Ralph.

Do you not want to pay higher?

I think I'm a lot more conservative.

Yes. She is more conservative than I am.

Can I just jump in with 1 more. On capital structure now. So net debt at the holdco is now down to, I think, 1x. And you're looking to pay down all the dollar debt, does that mean you go to some very -- you deleverage completely? And MTN ends up in some sort of net cash or ultimate cash position. How should we think about the debt levels within the group?

Yes. I suppose, firstly, I think important that we emphasize that we will remain with the guidance at 1.5x. It is important that we keep the financial flexibility, and I think to Ralph's point around capital allocation, we still have a business that's growing. So we want to make sure that we support the business from a growth perspective. And obviously, there's a number of issues that, from a risk perspective, that Ralph mentioned around our ability to be able to upstream from markets. So those are the things that we are thinking about. I think certainly, the U.S. dollar debt, if I can put it that way, we would like to explain it as much as possible because it does have some risk from an interest rate and ForEx losses perspective. So the more we can actually reduce it so that we increase the rand-denominated debt better yes. But we do take into account that we are still in a growth phase.

Just checking if there's any more in person questions.

My name is Roy Mutooni from Absa.

We can hear you Roy.

Perfect. Okay. Cool. Just on the PSB license, maybe if you could just give us a little bit of a rundown on expected milestones or the time line towards full approval. And also, is it a big leap from where your current business there is with regards to CapEx and operationalizing?

Yes. I've got Serigne in the room who can give you even better answer than I can. But suffice to say, time lines, we have the approval in principle and that requires us to interact with the CBN and meet certain conditions. We are meeting those conditions and quite far progressed but the time line of moving from AIP to a full license or nothing else that's subject to the CBN. So there's no specific time line that they work to that says, we will complete an AIP process by time. It's not like when the Competition Commission says intermediate merger, we'll do it by 60 days. Here, there isn't a specific time line towards that, but we have engaged since November quite extensively. And from our side, there's nothing outstanding as we said.. To your point, trying to answer it in short, the PSB is very different from a super-agent license because we are effectively then become a payment services bank. So the float in the wallet economics are with us as a PSB banking structure as opposed to right now a super-agent license, we are an agent and the float would remain always with the banking partners that we have. So the economics of the 2 businesses are actually quite fundamentally different. But I'm looking at Thato, he was saying I mustn't give the thesis here. I think what you -- what we are encouraged with is that we have already leveraged always grown our distribution and got our agents and used to taking naira as part of that whole process of them taking naira and giving airtime. So that's kind of engagement of our distribution channel is well advanced, and we saw -- you saw the acceleration, particularly in quarter 4, where we have 9 million MoMo subscribers in Nigeria, but that's under the PSB license regime sorry, under the super-agent license regime. The PSB license regime has got obviously much better economics for us. We are waiting the PSB -- sorry, the CBN to give us confirmation to the version, but there isn't a time line that they work to.

Hello, Ralph, it's here. Just a quick question because you guys are getting into -- by the way [indiscernible] business the Financial Mail, because you guys are building platform businesses as part of the evolution of the business, et cetera, I wanted to check because as a mobile operator, you guys have always had the advantage of being a very sort of cash and liquid business, right? How are you guys thinking about, if at all, you not subscription simply because a lot of platform businesses are trying to move towards software as a business and type of annuity revenues, some type of subscription type of models and all of that stuff. How are you thinking, if at all? Or are you okay with remaining as a cash sort of type of operation?

Yes, I think it's a structure of our markets. I mean, [ Madiva ] you can do a Netflix subscription, you are going to pay $6 to $8 because you have the money. Our business is largely a prepaid business. And we're dealing with customers that have largely limited amount that they can spend on communication services. As a data point, if you're in the U.S., a telecommunications customer spending $40 to $50 average revenue or ARPU, I mean we are dealing with 3 to 4, maybe up to 5. So our customers are more financially constrained. So we need to deliver services in much smaller than you would in developed markets. So from a platform perspective, we see connectivity as a platform. And I think 5G evolution will turn connectivity absolutely into a platform. Fintech's a platform. The other 1 that we've spoken about and you haven't asked questions about it, which I'm surprised is really what we're doing around our FiberCo that we see as a platform that evolves over time into an open access model as you need the levels of investment to meet the data traffic demand that will come with 4G and 5G evolution and so forth. So where we are super focused right now is connectivity, fintech and InfraCo. We have a lot of digital services. But our desire is not to develop the content. It's very expensive to do that. We leave it to others. We can curate it and take a margin of that. But that's not going to be a big part of our revenue going forward. Think of the revenues being and the growth of the company being core connectivity fintech and then the InfraCo, the FiberCo business that we said has progressed very well in terms of its own expansion in the last year.

Okay. I think we're going to have the last question. Jay, do you have a question?

I can hear you.

Maybe just on Ethiopia and any plans to re-explore the potentially the third license there?

No, for now. You heard us talk about capital allocation and our constraints and you saw our batting order, the last time we looked at it and walked away because we couldn't see our way in terms of the financial investments. We've got our hands for right now. And I think we might be spreading ourselves too thinly at the moment. And if the license come, we'll have a look at it, but it's not right up there in our batting order. There's a lot that we have and we only have 24 hours in a day and only ZAR 34 billion of CapEx. And so this balance sheet has only got ZAR 20 billion of cash. So it's right now, we have had the irons in the fire.

Thank you very much. I think we've come to the end of our time. I don't know if you've got any closing remarks, Ralph.

No, I just want to thank everybody and who's dialed in and let me to see shareholders actually at 14th Avenue for the first time in 2 years. And I just want to thank you for your support over what has been a challenging time, and we trust that the delivery that we have made in the last year is satisfies you. And we continue to be very focused on taking advantage of the growth opportunities that we see in the market. Thanks very much.