MTN Group Limited (MTN) Earnings Call Transcript & Summary

Good afternoon to everybody. My name is Thato Motlanthe. I look after Investor Relations for the MTN Group. And it's my pleasure to welcome everybody who has come to the Innovation Center at 14th Avenue and also to welcome all of the people who have joined on the various platforms that we have, particularly the MTN is across our markets, obviously, who make the results that we've put out quite possible. I think let me just kick off with the usual housekeeping items that we have. Firstly, you should be seeing on the screen our standard disclaimer and safe harbor statement, and that covers this presentation as well as the event that we have here today. Secondly, if you're in the room, you should be able to latch on to our WiFi. And again, the details should appear on the screen now. We'll hold it up for a second or 2. And then lastly, for those on our social platforms, you can use the hashtag # @MTNAnnuals23, MTNAnnuals23, and our X Handle is @MTN Group. Actually, most exciting for those who have actually joined us today, we do have refreshments outside, just in case we forget to remind you at the end, and that's just a little bit of an incentive and thank you for coming through. But if I turn to our year end in review, I mean I think we've navigated a couple of challenging years over the past couple of years. But I think if challenging was a person who would look a little bit like 2023. Now I won't be a spoiler for Ralph and start of his presentation. But I think given the extreme volatility that we've seen in our external environment, you'll see that the financial performance that we're putting out is actually fairly encouraging. So having seen the environment, I think the flip side of it is that if resilient was a person who would probably look something like MTN and in particular, the many paces across our markets, as I said, who make this possible. And I think they've shown extreme dedication, innovation and commitment to the cause and it's a very big reason why we're still standing today. Of course, the stakeholders have kind of walked the journey with us. It's been a rough ride. We do appreciate you sticking with us. And I think it's also appropriate just to give a shout out to our leaders, some of whom are in the room today, including the Board, who have given us a bit of a steady hand of guidance and leadership as we've navigated this tough time. So as I mentioned, today's presentation, we'll provide a little bit of color as to how we've performed. Obviously, there's a lot of complexities. So we thank you for your attention as we go through before we get to the Q&A. And I think if you look at the running order of our presentation, it will be the usual one that we have. First of all, some highlights and operational strategic review from our Group President and CEO, Ralph Mupita. Then Tsholofelo Molefe, our Group CFO, will come up and give us a financial overview, and then Ralph will come back up to give us some thoughts on outlook and priorities. We'll then open up to Q&A in the room and those who are on the webcast, please send through your questions, and we'll read them out for you. Yes. So I mean, I think we can get into the run of the presentation. And I think with that, it's my distinct pleasure to welcome to the stage, our Group CEO, Ralph Mupita.

Thato. Thanks very much and extending my own welcome and thanks for all the shareholders, investors and broader stakeholders who are joining us here in 14th Avenue for those who are not 14th Avenue, the room is full. It hasn't been this full, I think probably since COVID. So good to see stakeholders here. And also thanking all of our broader stakeholders of joining us on various media platforms. And also like Thato wanting to thank the MTNers who always give Tsholo and I the pleasure of presenting the results that we are going to share in the next 45 minutes or so. I also want to acknowledge that our sales and financial results came out. It's quite a lot to read. So trust that you've managed to get through most of it -- but what Tsholo and I will try and take you through are the sailing items that give you a sense of how the year was in terms of operational and financial performance, but also importantly, to give you our sense of the outlook and how we think we will navigate the outlook that presents itself in 2024. So going straight through to the highlights, I wanted to talk about 4 main themes. The first 1 has been the point that Thato has raised, which is really that we navigated a very challenging external environment, principally driven by 3 factors. The 1 is that we saw inflation remaining quite elevated in most of our markets. and that found its way into the costs, the operating costs, the interest cost on the debt. Tsholo will cover that in more detail. Secondly, currency devaluations, most notably in Nigeria where the naira was around 462 odd in May of last year. There was a liberalization of exchange rates in June. And by the year-end, if you look at the NAFEM was over 900. So closing rate was almost 97% down to prior year. So a significant impact that works its way through the P&L and into the balance sheet and more around that. With regards to currencies, we had the paucity of foreign currency in some of our main markets, making it very challenging for us to upstream dividends and management fees. And as many of the investors will recollect is that we did take scrip dividend both in Ghana as well as in Nigeria in anticipation of the difficulty of upstreaming cash out of those markets. The final point is really geopolitical tensions that we see more broadly across the world but particularly in our region in Sudan. Sudan has been in a situation of conflict since April of last year, and that impacted us and the dynamics of that, whether it's in service revenue, in impairments and the group effective tax rate, Tsholo will take us through all of that. Now notwithstanding those challenging macro, I think we had a very decent and solid commercial execution of the strategy. When we look at usage growth, we saw very healthy usage growth across our markets, notwithstanding the SIM registrations that we had in key markets such as Ghana and Nigeria. We navigated those through to still deliver on pleasing usage user growth and usage growth. And if you look at the underlying volume of traffic across our markets, in the 2 big drivers of growth going forward, data -- exclude the JVs that we have, data growth -- data traffic growth was about 35%, and the fintech transaction volumes were about 32% signaling a very healthy set of demand for the services that we offer to our customers. The third area was really around financial resilience, and we've done a lot of work on the balance sheet over many years to ensure that the business is -- has financial resilience. First, to absorb shock but also to be able to take advantage of the opportunities that we may see in the market. Last year was a year of absorbing the shock and we drove the expense initiative program that we had set out. We've targeted ZAR 7 billion to ZAR 8 billion of expense efficiencies, and we're well ahead of our target for last year, delivering ZAR 2.6 million against a target of ZAR 1.5 billion that we set for ourselves last year. And then when you look at leverage and liquidity all looking in very good shape. The fourth area is really around strategic priorities, executing on our strategy in line to what we've committed to stakeholders. On the fintech side, concluded 2 agreements with Mastercard, the commercial agreements and the minority investment definitive terms were concluded at the beginning of this year. On the fiber side, we're beginning to push ahead with the structural separation. We are working on the east to west with Africa50 and started the carve-out of some of our markets starting with Zambia last year in structuring a sale and leaseback between with Baobab with the Zambia OpCo. And the final point is really around portfolio optimization. We have now exited Afghanistan. We announced our Middle East exit in 2020. And said the Phase I would be focused on exiting the consolidated subsidiaries of Syria, Yemen and Afghanistan and with the conclusion of the deal with the M1 affiliates, we are now out of Phase I and have completed that. So very good progress, and we'll cover some of that in a bit more detail in slides to come. I won't dwell too much on the financial outcomes because Tsholo will take us through that in a lot of detail, but pick up some of the key KPIs. Service revenue at 13.5%, broadly in line with our medium-term guidance. Sudan, as I mentioned, had ongoing conflict in the market, and that detracted from overall service revenue growth at the group level by 0.6% at the group level. So you could have added that back in and the group ex Sudan grew at 14.1%, which would have been within our guidance range. Data and fintech, obviously, were growth drivers. We must never forget voice. Voices grew 3.3% and still delivers a healthy contribution to our total earnings. On the earnings side, you'll see that EBITDA on a constant currency basis grew quite pleasingly at 9.8%. Let's around it up to 10%, so a lot of the activity in the P&L happened below EBITDA, and Tsholo will take you through both the tower lease liability related costs and some of them are noncash, unrealized losses as well as finance costs, that's where a lot of the strain in the P&L, but above EBITDA, a very solid performance on growth. And by the time you get to adjusted headline earnings, again, relative to the prior period, notwithstanding the tough macro, we delivered $12.03 on an adjusted headline earnings per share. I won't cover the balance sheet items, which I raised a little bit earlier on, but I think at the holdco level, pleasing to see that the mix of debt is quite favorable. We're down to 23% of the debt stock at the holdco level is in USD. We've got a small stub of 2024 bonds and the 2026 bonds to deal with. The rest of the debt is in ZAR. So that profile of managing our liability and currency mismatches relative to the currencies we earn revenue that has improved substantially. Our target was to be below 40 in and we're down to 23% and much thanks to the finance team for delivery there. Then on returns, just focusing on 3 KPIs, operating free cash flow before spectrum payments just under ZAR 46 billion. And again, part of the narrative that Tsholo and I want to cover is that there are cash and noncash items that are through the financials, but when you're looking at operating free cash flow, it's fairly robust given the headwinds that we saw. And the ROE is up at 24.4%. As Tsholo will show we've seen a very steady improvement in ROE over the last 5 to 6 years. And the Board did declare a final dividend for 2023 that will be payable distributable in April of this year of $ 3.30 in line with our minimum guidance that we announced last year of $3.30 more of that a little bit later. Moving on to the operational and strategic review. And as usual, starting with South Africa. And South Africa, the 2 main stories in the year under review. Firstly, load shedding and the impacts of load shedding in the year, we had actually more load shedding days last year than the year before coming to Thato's point around a challenging macroeconomic environment. But we're very pleased that the SA network team and the SA team more generally, has done a great job improving network availability in the year. We invested ZAR 10.1 billion of CapEx ex leases and of that ZAR 2.6 billion was spent on network resilience, ensuring that we have backup power across our sites, and we ended the year ahead of schedule, with network availability above 95% in total. And for the sites that we had deployed the investment in, actually, we're above 98%. So a lot of work done to deal with the network and ensuring that we're resilient as we anticipate that we could have more load shedding that could go all the way up to Level 6 and potentially above. So it was the right call to make that network resilience, and we're seeing the benefits of that as we lap last year, the first 2 months of the year have shown us the encouragement that investment will yield fruits and returns for our investors. The second point is really around the consumer under pressure. And in particular, the consumer under pressure in the prepaid segment. And we've seen sequentially an improvement on the prepaid side, exiting Q4, much better than we had started Q3, in terms of, in particular, voice prepaid. And that trend we've seen come through. I think what would have been a detractor in the overall service revenue that MTN delivered of 2.5%, and some of the base effects that we've seen, particularly on consumer postpaid side as well as on wholesale. You will remember that in 2022, for much of the year, Cell C was under a cash basis of accounting. And in Q4, we went to accrual accounting that border a lump of revenue into Q4 of 2022, creating a bit of a base effect for the wholesale. But we can cover a bit more of that in Q&A if you want to go there. But as I said, we've seen encouraging exit out of Q4 in terms of the South African business. If we go to Nigeria, Nigeria obviously released results already. Karl is in the room today to take some of your more difficult questions around Nigeria. But again, the real issues were the macro inflation spiking up into the mid-20s in the year. And then the naira devaluation, which was very sharp and fade it's way, in particular, into the operating costs, particularly network operating costs. We also had to contend with the SIM registration in the year. And the beginning of last year, we were dealing with in Nigeria, the naira redesign, which there were cash shortages, which affected our ability to ramp up both on the GSM side as well as on the fintech side. But we are pleased with the sustained investment that we made into the network. We spent about ZAR 12.7 billion of CapEx investment. We secured some additional 2,600 spectrum, which really helped us to deal with the surge in data usage and actually will help us quite a lot in the year ahead that 2,600 spectrum will enable us with the lower CapEx envelope as we look at 2024, sustain sufficient capacity to deal with the growth that we see. On MoMoPSB, we did the Booster acceleration plan in quarter 4, and we saw pleasing results, particularly around the ecosystem build-out as well as ending the year with active wallets at 5.3%. So it's a little bit lower than we had anticipated or would have liked. But notwithstanding all the challenges we faced, particularly also at the end of Q4, having to do a revised registration process in Nigeria, we are encouraged by the momentum that we're starting to see in that business. Moving on to the markets business. The other 1/3 of the company, again, very pleasing results we're seeing in both the SEA and WECA regions. Data and fintech are sustaining the growth there. You see service revenue all in the mid-teens. Data revenue growth also kind of mid-20s for both SEA and WECA. Very pleasing growth from markets such as Uganda in the SEA market, they came out with the results pretty recently, again, sustained growth on both data and fintech. And you see that SEA's contribution of fintech service revenue to total is about 28%, showing what the potential is over the medium term as more of our customers on the GSM side also take on the fintech services. Also on the WECA side, Ghana, a very pleasing set of results. Ghana faced a lot of headwinds in the last 2 years. So it's quite pleasing that Salomon team have navigated the last 2 years of headwinds, firstly, from the declared S&P with all the restrictions that come with, declared the dominant operator but also the macro environment that came through in Ghana. But pleasingly, we're starting to see the inflation decelerate into the mid-20s, having gone as high as into the early 40s in periods past. On the MENA side, obviously, MENA from a consolidated point of view was basically Afghanistan and Sudan. Thereon in Sudan, as I mentioned, really, really challenging operating environments. And actually, we're running the business out of the majority of the team is out in Egypt because of the conflict doesn't enable our team to be based back in the headquarters at Khartoum. So very, very challenging operating conditions, and Tsholo will take us through the financial conditions there. And then in our investment in Irancell, you see that the earnings grew at just under 28% and the snapp business there continues to grow just shy of ZAR 5 million daily rides in Iran, having been up from 3.7% in that market. If I move on to the fintech ecosystem. Again, the ecosystem continues to develop and expand very pleasingly. The service revenue growth of just shy of 22% was underpinned by the transaction volume that I mentioned early on, but also the transaction value, we're seeing close on to $272 billion of transactions through the platform. Cash in cash transfers, P2P, but also the advanced services are starting to contribute. Most pleasing has been the merchant ecosystem development, which has expanded very healthily during the period. Two big partnerships that we secured in the year. The first one was Ericsson, where we extended our partnership to include a focus on our advanced services. Our advanced services in the year actually grew, as Tsholo talk about, close on to 55%. So that's payments in e-commerce, banktech and remittance are coming off relatively low basis, but growing exceptionally fast. So the contract we've entered into with Ericsson, which came with a bit of CapEx into last year. So you'll see our CapEx envelope is slightly more elevated than you would have thought about ZAR 38 billion ended up at ZAR 41 billion, that's one sort of CapEx in recognition of the new contract that we've signed, will enable us to push ahead with advanced services and take a lot of our solutions up in the cloud. The second one we've spoken about quite a bit, which is the MasterCard relationship, commercial execution now underway in the SEA region, that's where we're going to start things, but ultimately, take it across all our markets as well as the minority investment that they took it up to $200 million for a valuation of $5.2 billion. And we will, as I'll mention later, that we are continuing with our work towards further minority investment into that fintech platform. If I talk about the portfolio transformation, maybe a few key messages really around localization and the portfolio transformation. We didn't progress with the localization, particularly in Nigeria, given the macro -- but we continue with work around Ghana, Uganda and Cameroon as we look forward. And as I mentioned, on the exits, we have concluded on Afghanistan. We are engaged on the work for the 2 Guineas that has not been concluded. We remain in engagements with Telecel there. And as and when we make progress, we'll update you. The other area, as I mentioned, our focus is minority investments into our platform. We've already demonstrated that with fintech. We are actually looking at the other platforms, fiber and even ayoba, -- we don't talk a lot about ayoba, but ayoba has a very pleasing performance under 36 million customers using that platform daily. And many of them in markets we don't have a footprint like the DRC and in Egypt and in Tanzania. So we're beginning to start the process of building within our micro channels, the opportunity for monetization, such as ad revenues that we can, so with that as a strategy, we are beginning to explore now a lot more in terms of minority investments into those 3 platforms. Coming into the shared value, again, I won't cover all the detail that we have on this chart. Much of this detail is in our sense that we shared earlier today. But a few big call-outs on decarbonization journey on Scope 1 and Scope 2, and these are measures that are on the SBTi framework. So we're down 13.1%. And when we exclude the SA towers sold to IHS. So that's very good progress in the period that we've just reported, good progress on broadband as well as diversity and on both, for sure, we can always do better. So we're pushing ourselves. But we've also been able to see that the average cost to communicate and across many of our markets is down approximately 9%. And in that EVA framework of the value that we have been able to deliver across our markets, a pleasing ZAR 159 billion relative to the same period last year. Before I pass over to Tsholo to take us through the financials, and I'll come back to discuss outlook and priorities. Again, we constantly marking ourselves against the targets that we set ourselves. The 1 key area that's in red there is really around SA service revenue. As I said, the main area of the traction there has been around the base effects that we saw, particularly around wholesale given that we moved Cell C to the accrual base of accounting as well as the new contract that we signed and some of those benefits for Cell C would have been -- come through in Q4 of last year. Most pleasing in SA, where we've had a real challenge for 2 years plus has really been about the consumer prepaid where, as I mentioned earlier on, we're starting to see improvement, particularly around voice Quarter 4 voice deceleration was minus 9% on prior year. In the previous quarter, it was minus 12%. So we're seeing a steady improvement with regards to that. But Tsholo will take you through more of the financials, and I'll be back to cover the outlook as well as our priorities. Thank you.

Thank you very much, Ralph, and a very good afternoon to everyone joining us for the results today. And I think, as Ralph shared with you that we operated in a very tough macro context. So I'm really encouraged by the financial performance that was resilient under these circumstances, and it really gives me pleasure to present to you the financial performance under review. So before I take you through the details of our financials, I think it's important to just highlight some of the significant items that have impacted on our results. Firstly, as we indicated, FX volatility in the markets we operated in a very challenging macroeconomic environment. We saw elevated levels of inflation. And this really had a significant impact on our operating costs, in particular, but also the naira devaluation had a significant impact on our losses on our finance charges with FX losses of about ZAR 21 billion, which I will share with you later. And in addition to that, as we experienced high inflation, we had blended average inflation for the group of 16.7%, and this also impacted on our operating costs, including our tower lease expenses as well. We also had to apply hyperinflation to our Ghana results this year. We reported previously as well that MTN Nigeria's results included a restatement of 2022 on 2022 financial results. And this really reflected cumulative net effects of restating the lease liabilities, the deferred tax liabilities, the right of use as well as the profit after tax from a Nigeria perspective and therefore, having an impact on group as well as we translate in our reported currency, which is in to ZAR. At high level, this impact on group result was on the 2022 opening balances of retained earnings which was restated lower by about ZAR 2.4 billion. And on the 2022 profit after tax restated by about ZAR 407 million. And in terms of 2022 earnings per share we saw an impact of $0.17 per share. Lastly, we also recorded the asset impairment in particular on Afghanistan of ZAR 900 million, which was a remeasurement of noncurrent assets held for sale. We also saw an impairment on end-to-end Sudan as well as ZAR 700 million, particularly due to the damage to the warehouse with the conflict happening there, but also the hyperinflationary impacts as well. So these items had obviously had an impact on our expenses, our EBITDA as well as headline earnings per share. So if I can move on to the details of our results. We're starting with the sale end points on our group income statement. You'll notice that we delivered service revenue growth in constant currency at 13.5%, which was in line with our medium-term guidance. It is important to note, however, that we were able to deliver service revenue growth if we exclude the impacts of Sudan at 14%. EBITDA before once-off items increased by almost 10% in constant currency. And this was really driven by solid top line across most of our markets. However, we saw high OpEx growth, as I indicated, really putting pressure on our EBITDA margins, with a margin dilution of about 1.2 percentage points to 41.5% in constant currency. I think Ralph mentioned it from a reported perspective, EBITDA margin at 40.9%. On a reported currency basis, you'll see depreciation also increasing by almost 20% with the effects of hyperinflation from Ghana, but also the growth was really due to CapEx additions, including accelerated 4G site rollout in Nigeria, spectrum acquisitions during the year as well as the depreciation of SA towers right-of-use assets, which were not depreciated last year as they were held for sale. On net finance cost, you will see a significant increase of 113% to ZAR 39 billion, and this was really impacted by the ForEx losses in Nigeria of about ZAR 21 billion, and I'll unpack this later on in detail. As a result, you will notice our tax expense, therefore, declined by 55% due to lower profits where we saw a profit before tax declining by 77%. The reported group effective tax rate, however, increased to 66% this year, compared to 41.7% in 2022. And this was mainly due to much higher nondeductible expenses that we saw in Sudan, but also unrecognized deferred tax assets from the assess tax losses as well as the withholding taxes. But if we look at it from a normalized basis, our group effective tax rate was at about 39.5%, which is really in line with our guided mid high to -- mid -- high to 30 -- mid -- mid to high 30s, sorry. If we look at the noncontrolling interest, we also see quite a significant swing there. The interest from noncontrolling shareholders reduced to 75 million due to significant reduction in profits mainly in Nigeria as well as Sudan. At the bottom line, the underlying performance was really resilient with adjusted headline earnings per share at down 29 -- down 9.5%, and I will unpack this movement in later slides. Moving on to group service revenue. We continue to see steady growth on our voice with voice up 3.3%, largely Ghana and Nigeria growing at double-digit underpinned by the execution of pricing as well as CVM initiatives, but this was really set off by the decline we saw in South Africa of 12% on voice. Excluding these impacts from South Africa the voice revenue was about 6.3% up. Data revenue, which is the largest contributor of our group service revenue grew by 23% year-on-year driven from -- by strong data traffic growth in our markets, which again is supported by the continued investments we make on our network. The other call-outs here that are important is the growth that we see on fintech, 22% year-on-year as well as the wholesale revenue of 21% year-on-year. Before I continue with other elements of our performance from a group perspective, I'll just touch on South Africa and Nigeria, which are 2 largest markets, starting with South Africa. As indicated, we saw 2.5% growth in service revenue with voice down 12%, data at 7% particular. We also saw very strong growth coming through from fintech at almost 15% year-on-year. And wholesale increasing by 28%, largely from the national roaming deals that we have from telecom as well as Cell C. On the total expenses side in South Africa, we saw 7.6% year-on-year with cost of sales at 3%, largely driven by device and commission costs as South Africa continued to drive channel expansion. OpEx in South Africa went up by about 13% -- 13.5%. And the main drivers there was largely network costs, which grew by about 23% and really impacted by load sharing impacts as well as the electricity tariff hikes. Most of the expenses were well managed, however, with a salary cost growing below inflation at about 4.4%. The results of these high costs in South Africa, particularly with pressure on top line on revenue was a reduction of 4.4% in terms of EBITDA with a margin dilution of 3.6 percentage points to 35.9% in EBITDA. And this really expedite the gains on disposal of towers that we reported on previously. South Africa, as Ralph indicated, has spent ZAR 10 billion in CapEx, in addition to the network resilience problem, they continue to roll out their 3G, 4G and 5G sites with CapEx intensity, excluding leases at 19.5% overall. If I can then move on to Nigeria, very briefly, most of you will have seen the results that we presented and delivered in Nigeria on the 29th of February. So Nigeria again delivered another solid performance with a 22% year-on-year growth on service revenue, which is really in line with the medium-term target with voice, data as well as digital being the main drivers of growth. So as we can see 10% growth on voice with data at about 39%. And specifically, if you look at other, which is really ICT enterprise and bulk SMS growing by about 25%. With total expenses in Nigeria went up by about 32%, although cost of sales was 18%, it was below the Nigeria's overall inflation, but also below service revenue growth However, there was quite an increase on our -- on the operating expenses in Nigeria of about 39% and this was, as we indicated, largely driven by the network operating costs, which make up the bulk of the cost, which is really due to CPI impacts as well as FX devaluation and site rollout on the BTS lease rentals. We continue, however, to look at ways to manage the margin pressure that we are seeing in Nigeria with the cost efficiency program that we have. So as a result of this, we have seen, again, a margin dilution in Nigeria to 49.7% relative to 53.3% last year. CapEx spend in Nigeria was about ZAR 12.7 billion, largely driven by accelerated rollout of 3G, 4G as well as 5G sites as well with CapEx intensity, excluding leases at 17%. If we can move on to fintech performance. As I indicated, we saw 22% growth in the period, in line with our efforts to scale up the mobile financial services business, as Ralph indicated, with towers and transfer services, which still make up the bulk of the contribution to grow -- to group fintech service revenue grew by about 19% and 29% respectively. I think very pleasing was the strong growth that we saw in advanced services revenue, which overall grew by 55% year-on-year with payments and e-commerce growing by 40% and BankTech and remittance those still nascent, growing by about 99% and then 73.5%, respectively. As we can see on the right-hand side, the basic services contribution to fintech revenue remains stable at about 57%. However, advanced services have grown, advance services contribution to total service revenue has grown from 16% to now 20%. So if I go back to the performance of the group overall. Turning to group expenses. As you can see, total expenses was up 15% to ZAR 127 billion. with cost of sales up 11% year-on-year, largely driven by commission cost in our GSM fintech as well as digital businesses. We also saw an increase in interconnect and roaming cost as well, largely due to increased traffic volumes, but also impacted by the FX devaluation mainly in Nigeria as well Ghana. Operating costs from a group perspective increased by 19%, and the main drivers of these, as I indicated, was network utilities. As you can see, network utilities contributes 19% of the total cost, and it grew by 36%. And 2/3 of the network expenses actually was driven by Nigeria, in particular, to the CPI as well as FX devaluation impacts, but also the increased site rollout. South Africa also contributed to higher network operating cost due to load shedding impact as well as increased power costs. And some of the -- in other markets, the main cost pressures really came from high energy cost overall. OpEx growth was also driven by staff growth of 16%, which makes up 12% of the total expenses. But really, the main driver here was the additional resources we added to scale up our platform businesses in particular, fintech and the buyback businesses and others, but also annual salary increases were in line with inflation. As we indicated, our blended average inflation was 6.7 -- 16.7% in the year, but we also had increases in our IFRS 2 charge relating to provision for the share allocation that relates to our PSP share scheme. Other costs, which make up 17% of the total expenses were really the marketing and advertising expenses relating to our MoMo business, professional fees for the strategic projects that we are executing as well as some of the litigation costs. So given this macro impacts that we are facing, we do remain committed to focus on efficiencies to support our earnings as well as returns in the near to medium term. I think Ralph shared that we realized ZAR 2.6 billion worth of efficiencies, and this was ahead of our ZAR 1.5 billion target for the year. 42% of those savings were recorded in South Africa, and this was followed by WECA, SEA and then Nigeria as well. If we look at it by area, most of these in 2023 came from general and administration functions at 56%. We also saved about -- from network and IT, which contributed about 32%, then 14% coming from the balance of which is sales and distribution as well as marketing. So you will notice on the right-hand side that our total cost to revenue ratio also went up to 58.6% as a percentage of revenue from 57.4%, which really reflects the pressure that we are feeling from the macro impact. And as we announced previously, we are busy with Phase 2 of our expense efficiency program, which we call EEP 2.0, and we have plans to save additional cost of about ZAR 7 billion to ZAR 8 billion over the 3 years beginning from 2024. And we've identified a number of areas which are, among others, a review of a negotiation of -- a review and negotiation of our major contracts, including our tower lease contracts, decommissioning of legacy IT and simplification of those contracts optimization of commission structures as well as distribution channels. So in a nutshell, that is the plan from a cost efficiency perspective. If we move on to finance costs, you'll notice that our net interest paid increased to ZAR 8.2 billion, and this is due to increased finance charges and mainly from interest rate hikes across markets but also additional borrowings in head office Nigeria as well as Cameroon. The increase in finance lease cost as well was mainly impacted by the sale and leaseback of towers in South Africa and also, we also had a tower contract renewals in Cameroon and Ivory Coast. So the underlying net finance cost increased to ZAR 15.9 billion, and as I indicated, you will see that ForEx losses in the period amounted to ZAR 23 billion, of which ZAR 21 billion of that came particularly from Nigeria due to the FX losses following the devaluation of the naira. So as you can see from the table, this really had a major impact with net finance cost overall, more than doubling to ZAR [ 39 ] billion in the year. Looking at the headline earnings share analysis, firstly, just a reminder that the 2022 figures have been restated for the Nigeria FX losses as we indicated. So on this basis, your attributable earnings per share declined by 17.5% to $ 2.77, reflecting the lower earnings that unpacked earlier on. So this outcome was also impacted by the impairment of assets of $0.40 per share and the impairment losses I mentioned relating to Afghanistan of $0.50 per share. And after adjusting for these items, you'll notice that the basic headline earnings declined to $3.15 by 72% year-on-year. So the main impact on basic headline earnings was really the hyperinflationary impact $1.50 per share in the year, but the significant impact being on the FX losses of $7.15, of which $5.93 of that came from Nigeria. So if we do adjust for all these nonoperational items, we then get to your adjusted headline earnings per share of $12.03, which is a decline of $0.095. So moving on to CapEx. As Ralph indicated, we capitalized at ZAR 41 billion in the year, excluding leases, which really included a ZAR 2.7 billion of the ECW capitalized costs with CapEx intensity at 18.6%. If we exclude the ECW cost. ECW cost CapEx was ZAR 38 billion, which was really in line with the guidance that we gave to the market. When we look at it by region, 31% of the CapEx came from Nigeria, 21 -- 25% was from South Africa. And then the balance was a combined 35% for SEA as well as the WECA region. If you look at it from a portfolio perspective, we spent 72% towards network investment as we focused on investing in faster growth areas with the balance going towards IT CapEx as we continue to support the investment we are making on our platform businesses. Moving on to our cash flow analysis. You'll notice that our operating free cash flow declined by 6.4% year-on-year to ZAR 45.9 billion and this was mainly due to lower reported earnings than in 2022 and higher payments for leases and CapEx of ZAR 7.8 billion and ZAR 39 billion, respectively. And this is before the payments that we made for spectrum and licenses during the period of ZAR 7.4 billion. So when you look at other effects, we had inflows from financing activities of about ZAR 8 billion, largely from increased borrowings as well as localization proceeds in Ghana and Nigeria that we had earlier in the year. Look, we also made payments in interest as well as taxes of ZAR 13.5 billion and ZAR 15.8 billion in total respectively. And we also had a detraction from our investments of about ZAR 5.2 billion, and this related to restricted cash mainly in Nigeria on the letters of credit, but also but offset by an inflow from fixed deposits of about ZAR 1.3 billion. So these movements in total on our cash flows resulted in a positive free cash flow generation of ZAR 11.5 billion before we made payments to -- before we made dividend payments to group shareholders and minorities before the FX movement. If I may just spend time on the leverage and liquidity, which are important very briefly. As Ralph indicated, our balance sheet remains very strong with group net debt to EBITDA at 0.4%, which is well within our covenant limit of 2.5x. The slight regression from last year was really the FX movements. Holdco leverage at 1.4x, which was within our guided range of less than 1.5x, and we are really pleased with the significant improvement that we've made since 2019 at 2.2x. Holdco leverage was, however, negatively impacted by the effects of FX losses from our Euro bonds and also reduced cash balances from lower cash upstreaming during the year. Other impacts were really drawdowns from head office facilities, particularly to support the assay resilience program. In the year, you will recall that we had indicated we settled about now $353 million from our maturing 2024 bonds, in line with our guidance to the market. Now this brings in total the amount that we've been able to early redeem on our Euro bonds so far to $1.2 billion. Accordingly, we've managed to reduce our dollar debt now to 23%, which is really way below the target we had given ourselves of keeping it below 40%. Our Holdco liquidity headroom remains very healthy at ZAR 44 billion with ZAR 16.9 billion in cash balances and committed undrawn facilities of about ZAR 27 billion and we are able to upstream this year ZAR 13.4 billion in total, of which ZAR 9 billion of that came in the second half of the year. You may recall that we had opted for scrip dividends in Nigeria as well as Ghana for FY '22 final dividend. And of course, this had an impact on overall upstreaming for the year. But overall, our leverage and liquidity are in good shape and really underpinned by the disciplined capital allocation framework that we continue to execute. Before I hand over back to Ralph just to touch on briefly our ROE development. You will note that the Nigeria FX restatement positively impacted the 2022 ROE moving to 24.2%. Our reported ROE stood firm despite lower earnings, but improved to 24.4% in an improvement of 0.2 percentage points, mainly due to foreign currency translation reserves from the naira devaluation, but also the revaluation reserve due to the decline in the IHS share price had the impact. So we are really pleased to see this overall ROE evolution over the past 5 years, which we continue to improve towards 25%, which is our guidance to the market. Ladies and gentlemen, I will now hand over to Ralph. Thanks.

Thanks very much, Tsholo. She has taken us through hopefully, she's giving you comfort in terms of the numbers. As I said, the SENS and the apps are very detailed. And as usual, I'm sure you'll have questions for our [ IR ] after today. But maybe I should spend the last 5 minutes really looking at the outlook as well as the priorities that we have and covering the aspects of our investment case and our medium-term guidance. Just on the context in terms of how we look at 2024? A couple of key messages is, we think that the headwinds are going to remain relatively elevated. We think inflation will remain relatively stubborn, we have been encouraged by inflation, in particular in a market like Ghana where it's come down. But when we look at Nigeria, we think we are going to see inflation as we look at bank data and other data that it will remain elevated in some of our key markets. Exchange rates, the naira has been volatile, the actual direction of it strengthening or weaken remains relatively uncertain at this particular point in time. So we have to plan and operate in Nigeria with a couple of scenarios having base case risk and short cases so that we can actually run our business within that scenario. We do think that foreign currency will remain quite challenging to access particularly for management fees and dividends. And obviously, the impact on lease liabilities will be something that we will have to manage, and we are engaging with the various tower companies. And then from a regulatory perspective, I think it's going to be important for us as we engage with the regulators more broadly around how do we offset some of these costs, which are working the way into network operating costs with tariff increases as well as price optimization that we will have to manage within the portfolio of products that we take to market. And localizations will become -- remain critical for us as we navigate this year, as I mentioned, Ghana, Cameroon as well as Uganda remain markets where we believe the execution of those localization agendas becomes super important. And obviously, the geopolitical environment continues to be relatively uncertain, both at a global level and in some of the regions we operate in. Sudan as a case in point, the end of the civil war there does not look like it will happen anytime soon. So overall, our message is that we think the headwinds will remain, and I point out the naira volatility and the uncertainty in that direction. But given that as a backdrop, how do we think about the business? I think the first thing is that the case for the growth that we see across our markets over the medium to longer term remains intact and this is a chart that we've shown you for several reporting periods that looks at traffic growth for data on the left-hand side of the chart as well as fintech transaction volumes on the right-hand side of the chart. And we've been tracking this since COVID to see the kind of average consumption per quarter of data traffic as well as fintech transaction volumes. Pre-COVID on the data traffic 282 petabytes today as of the end of last year, it's 1,394 petabytes. Fintech, 1.3 billion transactions in the quarter, that's 4.4 billion. So the demand for our services across our markets remains very, very strongly intact, notwithstanding the challenges that we're facing in some of our key markets. And therefore, we believe that the investment case that we've positioned over the last couple of years, which is that there is a growth story that underpins MTN driven by demographics, driven by the market positions that we have, #1 and #2 in all our markets, mostly #1 network positions on an NPS level across our markets. And the scale and the balance sheet strength should give us this attractive profile. We've spent a lot of time looking at our capital allocation framework in the course of last year to see that if it's still appropriate within the context of the macro, which has changed quite fundamentally, particularly on the areas around inflation and currency volatility. And we've come up with a conclusion that certainly for now and in the near term, that framework and that batting order certainly remains the right one. We've engaged investors, spoken to us about buybacks with a buyback should rank higher within our capital allocation framework. And we felt that where best to put our capital is to fund the organic growth that we see. And as for next year -- sorry, for this year, we're planning to spend between ZAR 35 billion and ZAR 39 billion of CapEx to sustain our market positions and keep our networks pretty well invested as well as our platforms. The point around stabilizing leverage remains important. We still have got a bunch of euro bonds that we have on the holdco balance sheet, and we want to settle those over the near term. And this part of our mix of total shareholder return, we think that the dividend remains an important part of our own investment case. And therefore, selective mergers and acquisitions ranks lower as does our share repurchase and special dividends. So importantly, we're keeping that framework as it has been, but having spent some time to assess if there are parts that do need to change. So with that as context, what are our priorities in the near term? Firstly, to sustain operational momentum. So in South Africa, completing the network resilience remains a priority. We spent ZAR 2.6 billion, we'll spend somewhere between ZAR 1 billion to ZAR 1.5 billion by the end of Q2. Charles is pushing his team to complete the end of Q1, but give it some headroom there. So we'll spend another ZAR 1 billion to ZAR 1.5 billion to complete that program where all our sites have got required resilience of battery backup power, solar where it makes sense and static and mobile generators where required to ensure the network availability remains above 98%. We are seeing some improvements on the prepaid side and looking to sustain those. There's work obviously to be done on the postpaid side as well and sustaining our momentum on enterprise [ on health sale ] will also be key. In Nigeria, it's really all about recovering both particularly the negative equity position that we have and finding a medium-term solution that gets the business back towards an acceptable earnings profile, the FX resets in the tower contracts as well as CPI escalations have really worked their way into impacting the margin of that business. The top line is actually of that business is very healthy. Our [ quality team ] are launched a set of new products in Q4, and we're seeing decent top line growth. We still are focused on ensuring that we have some relief as an industry in Nigeria for voice and data. There hasn't been any increase. But as you can see from Tsholo's slide, quite a substantial increase in network operating costs, and we need to be able to fund those also partially through these price optimization and tariff increases. The second priority is really accelerate our portfolio -- platform strategy. Fintech ecosystem. Now it's the time to really push hard on the advanced services. We've got the partnership. We're actually looking to launch as we end up in quarter 2, it was early on in quarter 2. On the issuance and acceptance side, and the remittance opportunity is one that we've agreed to work on with Mastercard as well. And the fibercore separations accelerating those and looking at completing our east to west link that we've partnered with A50, Part of African Development Bank to roll that out also to help with the latency of our networks across markets and also to be able to monetize there. We are focused on further minority investments in the platform, including fintech. So we are also engaged on that as we speak, and that will be something that we update as we move ahead. The third area is really around capital and expense efficiencies. The EEP 2.0 that Tsholo spoke about, ZAR 7 billion to ZAR 8 billion of expense efficiencies over the next 3 years that we're working through and we'll report back on. I spoke about the tower contracts. CapEx efficiency initiatives will continue. Part of why the CapEx envelope is a bit lower this year than last year actually is that we're getting better price books from the vendors. We really pushed them out for better price books. And hence, we can feel confident that the 35 to 39 envelope will be maintained. And then on balance sheets, to Tsholo's point, cash upstreaming. We're not anticipating cash upstreaming in -- from Nigeria in the course of this year. The focus of this year really is to restore both the earnings profile and the balance sheet strength. And so the [ capital ] streaming that we're seeing will be from South Africa and largely from the rest of the markets business, which underpins pretty much the dividend guidance that we have given, which is $3.30 for FY 2024 payable in 2025. That's how we have framed that guidance for dividends. And we have to manage our debt profile, the debt at a holdco level has gone up to 1.4x. So we do anticipate some pressure at that level, but at the hold -- at the group leverage, I think, as Tsholo said, we're very comfortably there. And with that as a backdrop, how are we thinking about the medium-term guidance. So the medium-term guidance has been maintained pretty much as is, we just changed 1 KPI, which is really around fintech. Fintech grew just under 22% for the year that's just passed. We are calling out that over the medium term, the next 3 to 5 years, Serigne and team will really drive with our strategic partners, accelerated growth and we're pushing that to the high 20s to the low 30s as where you should see the fintech growth in the coming years, up from 22% that would have recorded for FY '23. Everything else stays the same. And as I mentioned, ordinary dividend guidance for 2024 is $3.30. So it's flat on the year prior. But we thought that it was important to keep it flat, mindful of the uncertainties in the environment. But the $3.30 is a level that the Board feels it can actually call out to our investors as something that we believe we can deliver. So with that, thanks very much for listening to Tsholo and I. I think we will take questions. I don't know who is managing the Q&A. Thato, do you want to join us up on stage?

Yes, please.

Okay. We are aided in our Q&A efforts with Charles, Dineo and Karl who are in the room. So any of your difficult questions from those businesses will pass them on to the 3.

So thanks, Ralph, and Tsholo for the overview. As I said, a lot to unpack. We are going to have questions for the next 20 to 25 minutes. So apologies in advance if it's too short, but we will be engaging with a lot of you over the next couple of weeks in any case. So I think as usual, we can start in the room just to see if there are any hands for questions. Presh and then Nadim.

Preshendran from Nedbank. Congratulations firstly on the results, Tsholo, Ralph and team. I've got 3 questions, if I can. Firstly, I think one for Tsholo, my traditional one. How much of cash was upstreamed in the last quarter from Nigeria? And at what FX did you get some -- the cash out at? And then coupled with that, can you give us a sense of how much is still in Nigeria that's waiting to be upstream to group? Second one for Charles. Congratulations on the network uptime. But it looks like your service revenue growth that last quarter at 2.2% was kind of low. So I just want to get more color on that because your wholesale roaming -- your wholesale revenue was up 28%, and your network uptime was up considerably from the year before. So still -- I'm not getting why it didn't translate to a stronger services revenue growth than the previous quarter. And then the last one for Ralph. Just some clarification on the Mastercard transaction because when I read the SENS, it says that they've -- they will invest up to $200 million with a $5.2 billion valuation. Can you tell us what was the actual stake that they're taking? Because on those numbers, that means they can take up to a 4% stake, and if I look at what they did with Airtel Africa 3 years back, they did a similar 4% stake for half the valuation. So I mean, I would have expected with the commercial agreements that they've taken that they would have maybe wanted to put more of an equity stake? And then are you looking for further partners in the fintech business? Or is there an optionality for Mastercard to go beyond that.

If I may start with the first question. We've had no upstreaming from Nigeria in the second half of the year. There is an interim dividend. As you recall, that was declared, and it's about -- just over ZAR 80 billion.

So no upstreaming in the quarter. So I can't give you an average exchange on what we -- Charles, can we have a mic for Charles.

I mean first point that I want to make is that the service revenue profile that you see, please look at it in comparison to the overall market performance and also start to look at Q3 to Q4. If you look at Q3 to Q4, you can see a proper incremental growth. Where is the difference? Is that in 2022, our postpaid and wholesale business, we had all these base effects that came into quarter 4. Now on a year-on-year comparable basis, the number looks more smaller. But if you remove and normalized for that to estimate a 3.9% year-on-year growth. But I think what -- to see better growth, just to Q3 to Q4 on prepaid and then to Q3 to Q4 on postpaid, you will see there a significant jump in terms of the performance of the business. Just as we promised, I think it's just distorted largely by the base effects completely.

Yes. And your Mastercard question, yes, the investment works out to that 4 percentage points that you raised. I think we've been clear in our communication that we are open up to investment with strategic partners that can help us accelerate the business up to 30%. So to the point, would we be open to more partnerships and more sell down in that business? The answer is yes. And we are progressing with various discussions in that round. You raised the point about valuation versus Airtel. I mean I can't comment on that. Obviously, it's a different timing when they did that, and it's a different business and I think the nature of the stake was underpinned by an event -- kind of capital markets event, if you look at the financial profile, and we didn't have a similar kind of put option structure to that investment at the 200 level. So yes, we will continue to anticipate, as I said earlier on, we're also looking in the platform such as fiber as well as on the Ayoba side.

Thanks, Nadim. I think you had your hand up, and then [ Charles ]

Just 2 questions from my side. First one, just for Ralph, a strategic question. Just on your batting order in terms of the capital allocation framework. I just want to understand, I mean, you've got some quite extreme potential moves in key markets in terms of macroeconomic parameters. Why would you not consider curtailing some of that CapEx? I am told you have more certainty whether some of the remedies like the price increases and so on, are coming into those markets. And then just another quick one for Dineo, if I recall correctly, in H1, South Africa, PBT was down more than 50%. I think it was largely because of base effects with regards to the sale of the tower deal and the depreciation associated with that. I would like to just get an update as to how that's trending and where you see that going from your own.

So first question is for me. The second Dineo you pick up. Yes. I mean on the capital allocation framework, I mean, as we guided that we spend in total CapEx is ex-leases 41 billion. We're guiding lower ZAR 35 billion to ZAR 39 billion. So you can put it in the middle of that and say, you want to compare ZAR 47 billion -- sorry of ZAR 41 billion with ZAR 37 billion. Obviously, we'll need to assess in Nigeria, our ability to actually spend that CapEx. So there is a Nigeria number obviously, in that [ ZAR 35 to ZAR 37 billion ] And in the event that there are much stronger headwinds, we might end up in a place where it's actually lower. What we also want to avoid is that if we -- unless we think the headwinds are permanent, if you think the headwinds are permanent, then you take a very different strategic position. We've said that the structural changes that are happening in Nigeria around floating the currency, removing the full subsidy, medium to long term are all the right things to be done. But then we look also into the Nigerian market, in particular, and we're seeing data growth. As you saw, data traffic growth is booming. And we've also been saved a little bit in Nigeria by the decision we make to get the additional 2,600, which has actually given us a lot more capacity to take on the growth. So we've got to kind of invest through the cycle at a sufficient amount for us to maintain our #1 position. Right now, we think that the changes are painful in the near to short term for sure. But the medium to long term is we've got to sustain a level of investment. If you pull out, as we did, you'll remember, 2015, 2016, we pulled and slowed down in Nigeria. We lost the plot to Etisalat. It took us 3 years to gain back that advantage. We don't want to make that same mistake of pulling the brakes so hard on CapEx that you lose the momentum for a multiyear period and no matter how much you invest, it takes you a long time. So that's the take we're having on Nigeria in particular in CapEx. The South African CapEx, I think, is proportionate to the opportunity and the resilience that we need to do and in all the other markets. But it's a great question. But as I said, the CapEx envelope actually is lower forecasted for this year ahead. And that's actually been a little bit of a change for the last 3 to 4 years. Dineo?

To the question on profit on tax, yes, we did sustain the pressure into half 2. So basically, there are 3 factors. One is that we had to accelerate our debt funding from the group in order to fund the resilience, as Ralph mentioned earlier. We spent about $2.6 billion on resilience in 2023. So we funded debt from group that increased interest rate. Obviously, because interest rates were higher in the current year, the impact of that came through as well. The second factor was then on depreciation and the lease impact with the sale and leaseback arrangements that we have with IHS. So I remember, it impacts depreciation and finance costs as well in terms of IFRS 16 accounting. And then the last point was the ForEx pressure. You may remember that about half of our CapEx is exposed to ForEx predominantly the euro and then we also have envelope in terms of devices exposure to USD. So those devaluations impacted ForEx charge as well. So the pressure on [ PET ] continued into half year.

Thank you. We'll start with Jon and then to Myuran.

It's John here from Absa. Just 2 for me, please. The first one for Charles. Just on extra time and the increase up to about, I think it was 36%. I mean, what are your ambitions for increasing that further? Or is this sort of the level that you're looking to keep it at? And then the second question is just on the options that MTN Nigeria has available to solve its insolvent status and whether this could include a rights issue and how MTN Group would think about this given its ambition to further localize its stake.

Yes. Look, I mean we -- remember, we came from 23% on [ extra time ] penetration, then went on 36%. So peer-to-peer, I think the likes of the competition around 43%, 42%. We think that the normal optimum rates should be 36%, 38%. We think that if we can operate in that sort of benchmark we should be able to sustain it.

I think some of our peers are in the 40s. So Charles is trying to make sure that we don't have growth or fully funded by airtime advance. On your question, Jon, we have an AGM in Nigeria on the 30th of April where as a business, we will come to shareholders. I mean that's MTN Nigeria, I'm speaking on their behalf to talk through the actions and plans that the company is taking to restore its negative equity position. So I don't want to preempt that by giving you any specifics. Suffice to say that we're looking at the full range of strategic options that resolve that position, but fundamentally resolve it in a sustainable way over the medium to longer term. We're not looking for any kind of shortcuts. We're looking for solutions that -- funded. You're all aware of what causes the strain, it's dollar exposures on the balance sheet. It's lease liabilities. It's our ability to get price increases as well. All of that gets put into the mix. And then obviously, importantly, for us to take a view on where the naira is going, ultimately it was very sensitive to naira movements, a few hundred naira here or there changes what you need or must do. But I would ask you to kind of hold back a little bit and on the 30th, we do have a responsibility. We've already put out on the NGX statement that we will have an AGM on that specific feedback to shareholders on the 30th of April. Next one, Myuran?

The question is on the expense efficiency program. Phase 1 was ZAR 7 billion to ZAR 8 billion, and it was in constant currency, I remember as well. and it was loosely 1/3 in South Africa, 1/3 in Nigeria; and 1/3 the rest of the OpCos kind of thing, right? Now the new version is another ZAR 7 billion to ZAR 8 billion from 2024 for 3 years. And how are you thinking about the breakdown there? I mean to the extent you are you happy to talk about it.

Yes. Maybe just a correction. I mean our target in Phase 1 was ZAR 5 billion, but we achieved over there. I think we achieved ZAR 6.4 billion, ZAR 7.8 billion is the Phase 2 over the 3-year -- and we obviously have various initiatives for each of the markets I think suffice to say that we still continue to focus on network expenses, in particular, negotiation of contracts with major vendors, including tower contracts. But also looking at legacy IT. But I think by default, given that the 2 markets that are large in their portfolio is MTN South Africa and Nigeria, you're likely to have the bulk coming from there. But all the other markets are coming to the party. So I can't give specific numbers as to which markets, but all of the operating companies are coming to that party including the group functions as well.

Thanks Tsholo. So the question up at the top.

[ Nathi ] from TechCentral. My first question is with regards to partnerships with satellite broadband providers. How much was spent on this in the last reporting period. And what's the timeline on these kind of providing value in terms of the coverage that they extend for you? The second is on the fintech side. Last month, Bank of South Africa launched a TC IB platform for regional instant payment clearances. There are similar initiatives in the eastern and western blocks of the continent and where does MTN see itself playing within those ecosystems.

Right, satellite, I'd say I have Mazen in the room, save myself from speaking. Mazen has been spending a lot of time on satellite partnership. What I can say is we not spent a lot of money at the moment. So it's not amount of money that we will be reporting. But we've done a lot of exploration with the LEO potential partners. And Mazen, you want to give an update?

You answered the question. So we are exploring different opportunities, all of them at the same time to leverage this new technology. So far, there has not really any specific spend, our aim to really explore the revenue share model with the potential partners. And definitely, that will come probably during the near future. Board will announce accordingly. So far, it's a partnership model that we are exploring with an aim to have a revenue share in mind. Thank you.

And then on the payment side, Serigne, you want to comment? You can just pass on the mic to Serigne behind you. Serigne I told you to sit in the front. You didn't listen.

Yes, just to say that interoperability that is about interoperability and interoperability is in the heart of our strategy. So we are integrated to most of those initiatives when it is in our -- in the oper -- in the countries where we are operating. So those ones that you just give the name, we are integrated to them and we work with all of them. And it helps us actually to develop our ecosystem and to have more partners connected to our systems.

I think there was another hand.

It's Stuart Mansfield from Investec. Just a question with regards to the hedging approach and the risk management approach, for example, the currency. I think you mentioned with the naira depreciation, financing costs increased by about [ 113%. ] And you mentioned -- so now you are planning and stress testing and just wanted to get your views on hedging some of that currency risk equally for the euro and for the dollar. Equally, for the interest rates, inflation being obviously quite high at the moment and interest rates potentially staying higher as well, your views on hedging interest rate risk. And also you mentioned for the PSP long-term incentive scheme, increase in the IFRS 2 expense, any clear views on hedging the equity in that space.

Yes. So I mean, I think in a market like Nigeria, if we start, there aren't any huge opportunities from a currency perspective for any hedging given the shortage of hard liquidity, but I think what we do obviously is when we look at, for instance, our capital expenditure, we try and front-load it in anticipation of further devaluations. So that's what we've done in the past. But as much as possible, we try as well to localize a lot of the expenses, even with some of the major vendors that we have. I think on the interest side, in South Africa, Dineo will probably talk more to what they are doing from an FX perspective. I think on the interest rate side, I mean, we try and balance between fixed and floating, obviously, mindful of the cycle from an interest rate perspective, we have considered things like interest rate swaps, but we are very cautious around those instruments because in a benign interest rate environment, you've got to be careful that you are not locked in. So we obviously have, from a policy perspective, a very clear view about the mix of fixed to floating, and that's how we manage it. Dineo you know do you want to touch on your hedging strategy?

Sure for SA. So what we do in SA is that we do take out cover options, and we derivative account for those. Going forward, we'll start with hedge accounting, just so that you can protect the income statement impact, but currently, with derivative account for the options that we take out. And 2/3 of our interest of our debt is floating rate and 1/3 is fixed cost. So in that, we were able to just hedge that rate as well. Thanks.

Thanks, Dineo. A couple of the questions did overlap with the webcast, but let me ask 1 or 2 from there. Why have you not been able to get price approvals in Nigeria for so long, please unpack the process that is being followed at the moment. And how you progressed? What needs to happen to get it over the line.

Lets get Karl in. Karl is sitting quietly there.

Hi, everyone. Charles and I are dressed identical. No. Look, I think it's been a variety of reasons. First, it was a political transition. And through that political transition, there was a delay in the appointment of key members of the government, specifically the [ EBC of the NCC ] and the honorable minister and then some time for them to settle down. We've communicated in absolute care terms, the need for price increase as much worse, but much more for the smaller players in the market who really have a severe sustainability issue. The NCC committed to undertake cost study. We believe that's well progressed. It's very hard to make a promise to say when exactly we are going to be able to get those price increases. But I think the urgency is crystal clear to everyone in the government, not just the industry players, the minister, coordinated minister of the economy, the Central Bank, the FIRS head, et cetera, et cetera. So we continue to be very hopeful that it's going to happen soon. We did do some price adjustments in the month of October, which was part of our momentum, particularly that you saw in quarter 4 and those were approved by the regulator. But we think it's pretty, pretty damn close.

Thanks, Karl. Maybe the last question. Why is FinTech growth so sluggish in Nigeria and what needs to happen to get it going strongly. There are a couple of people who asked that question.

Okay. So I think it's a multitude of issues here. First of all, Nigeria is a fundamentally different fintech market than the rest of Africa, the rest of MTN, of course, particularly when they started the journey around mobile money. Countries like Ghana started in 2009. And the first 2 years were actually sluggish. So there's significant competition from existing banking and fintech players, the depository moneraty banks, particularly for digital customers. And we've been putting the groundwork in place. We've pretty much executed that now. We focused on building the ecosystem around agents and merchants, and you see quite a bit of momentum. And we've built the wallet ecosystem we're now 5 points 5-odd million customers as of the end of the year. So it's been about building the basics. There is -- it is now time to accelerate along that journey. We have a digital offering, our app is now at the very worst case at power what you get in the rest of the industry. And now it's just execution puts on the ground. And it's to our strategy, focusing on the urban center with digital solutions and on the rural centers where people are not banked at all. And we're just going to continue plowing and it's going to take time. We've always known that. It's a long-term game, but we're building the ecosystem and getting the why it's active.

Thanks so much, Karl. I think we're going to wrap it up there. Just a reminder, refreshments outside. I'm going to ask Ralph to just give some closing words, and then I'm going to ask for 2 more of your minutes. There's a little bit of a video that we going to play after Ralph closes.

Yes. Thato always makes me do this closing. I think I'd close with my outlook and the priority section. But suffice to say, thanks very much for taking the time to spend with us today. As Thato said, we are on the road talking to investors and stakeholders more broadly for the next couple of weeks. Just to capture some of the key points that I raised again, we are anticipating continued headwinds in some of our key markets. But we see these as cyclical rather than structural. And because we see the structural opportunity remaining intact across the business, we are investing into the cycle. We have to manage some of the near-term challenges that we see, but we think that the business remains actually underlying, very robust and actually growing very well. If you work through Tsholo's P&L and you look at the cash items or the noncash items, the significant noncash items there when you look at FX losses, $23 billion through the P&L for the group, it's a significant number. And a lot of those are unrealized losses related to lease liabilities that we have, particularly in a market like Nigeria. So we will work through resolving those issues, but we remain very convinced of the investment case, very convinced that our capital allocation framework is the right one for us to be able to deliver value for shareholders over time. And thanks very much for engaging with us today. and look forward to seeing many of you on the road in the next couple of weeks. Thank you.

Thank you very much, Ralph. And just in case you missed the presentation, this is a brief summary and hopefully, the music gives you a little bit of an upbeat feel.