MTN Group Limited (MTN) Earnings Call Transcript & Summary

[Presentation] Good afternoon, ladies and gentlemen. My name is Thato Motlanthe. I look after Group Investor Relations for MTN. And it's my privilege and my honor to welcome all of you to the MTN Innovation Center here at 14th Avenue. Yes, I'm wearing a suit apparently, it's a thing. But it's a great privilege to welcome you to our presentation of the full year results to the period ended 31 December 2024. A special warm welcome to everyone who's in the house. Again, we appreciate you coming in as well as to our MTN family across our markets who've also dialed in. There are a number of platforms that we're broadcasting to today. We've got a webcast that we're live at. We're on CNBC Africa. And we're on the MTN Group YouTube and LinkedIn channels. So just before we get going, maybe just to start with some of the usual housekeeping. The first one is that you should be seeing the disclaimer and safe harbor slide up on the screen that really just covers today's presentation. Secondly, for those of you in the room, just to remind you again of the emergency exits. There's one to my right and one to the back of the auditorium. And then if you're sharing live updates, you can follow the conversation online. You can use our official hashtag, which is MTNAnnuals24, and tag us on @MTNGroup. And then finally, just for those who again who are in the house, there are going to be refreshments for you. You have not come for nothing. And if we just take a moment to reflect before we get the proceedings underway. I think today's presentation is against the backdrop, I think, of a long-running track record of MTN of driving growth and creating value. Over the past 3 decades, we've built a very strong foundation, I think, in terms of the reach that we've managed to create and the lives that we've touched as a business. So that really has cemented our position as leading Africa's digital progress. Now with today's presentation, obviously, we look at the performance past, we look about -- we talk about the outlook, which Ralph and Tsholo will talk about. But I think it's against that backdrop that we say when we reflect the operational and financial progress that we've made, I think, is something that we can all be proud of as MTNers and, obviously, our partners who have taken the journey with us. So just as we get into the presentation, let's just review today's agenda. It's the usual runoff play. We'll start off with some full year highlights that Ralph will take us through as well as an operational strategic review. Tsholo, who is our CFO, will come up and talk about the financial overview. And then Ralph will come back and give us some outlook and priorities comments. So just before we get going, just to remind you again, if you do have questions and you're on the webcast, please do use that platform for your questions. And without further ado, it is my great honor to welcome to the stage our Group President and CEO, Ralph Mupita. Over to you, Ralph.

Thato, I'm also wearing a suit, by the way, so. A very good afternoon from myself, Ralph Mupita, to all of our guests who have joined us here at 14th Avenue and those who are joining us from various virtual platforms. It's always an honor and a privilege for Tsholo and I to present these results, which are really the work of the 17,000 MTNers across our markets who have delivered these results. And really appreciate the time you've taken. And I think by now you would have seen the SENS and then annual financial statements and have started to work your way through. What Tsholo and I will try and do over the next almost an hour is to give you a sense of what we see as the key messages in our results as we presented them today. From my side, just to start off by talking about what we believe are the 6 key messages that are within our results. And the results are delivered in a particular context of probably 2 halves in 2024. The first half of 2024, characterized by a very sharp devaluation of the naira. The naira closed in end '23 at NGN 907, and at the start of January last year, many of you remember, it went to NGN 1,300 and at the peak was at actually NGN 1,900. So that sharp devaluation characterized quite a lot of our results in the first half. The second half of the year is still currency volatility, but much more muted. And we also benefited in the second half of the year with a renegotiated set of tower contracts in Nigeria with IHS as well as with ATC. And inflation was also starting to mute. So there's really a tale of 2 halves. And the underlying performance that we had consistently delivered started to bear and show fruits in the second half of the year. And as you see in our results, and Tsholo will present this, H1 over H2, steady earnings, cash flow, cash upstreaming and better leverage outcomes coming, so giving us some momentum as we exit 2024. The second message is really that the commercial momentum is still driven by the 2 structural growth underpins we see in our own investment case, which is data growing pretty strongly. We saw data growth growing at 21.9%, and Tsholo will take us through that. And then the Fintech business, much higher quality growth that we achieved. The base didn't grow as much, but actually the service revenue and the margins were expanding very nicely. And you'll see there that the growth is around 28.5% on service revenue. The third message is we are progressing with strategy and its execution. The first point that we'll cover is localization. We've completed localizations in Uganda and Ghana. And so those were outstanding strategic initiatives and they are now completed. We've made really solid progress in terms of simplifying the portfolio in exiting certain markets. We're out of Afghanistan last year, out of Guinea-Bissau and out of Guinea-Conakry. And on the Fintech side, continuing to expand the ecosystem, progressing with structural separations and deepening the partnerships that we have. The fourth, Tsholo will cover in a lot more detail, is the balance sheet. The balance sheet, again, experienced the effects of the 2 halves of last year. You well remember that the HUDCO leverage went above our guidance, 1.6x, at the end of the half year. By the end of the year, we're back in guidance at 1.4. And also the cash upstreaming was much better in the second half. That also helped give the business a healthy liquidity position, as Tsholo will cover. Fifth message, guidance maintained overall for the Group, and we've reinstated Nigeria guidance. We suspended Nigeria guidance last year because of the uncertainties around the macro. And we feel pretty confident this year that the outlook is more visible, and we are prepared to put our stakes in terms of FY 2025 guidance, which we have called out specifically, and then reinstating the guidance. Final message is really about dividends. We had guided for minimum dividends of ZAR 3.30, having assessed the usual solvency, liquidity and outlook criteria. We felt it's possible, the Board on Friday approved a dividend of ZAR 3.45 per share, also signaling in anticipation of a dividend of ZAR 3.70 for FY 2025 payable in April 2026. So those are the key messages. And starting with commercial momentum, let me pick up on that one first. And obviously, the commercial momentum in our business is largely driven by data as well as the Fintech side. And as I mentioned earlier, a bit more muted growth on the core connectivity business, 2.2% up. And that's in a period where we had the NIN/SIM registration. So we deleted a lot of subscribers in Nigeria, so that we could be compliant in meeting the NCC requirements of NIN registration. But actually, the active data subscribers grew pretty nicely, 7.7%. The data traffic, the demand and use of our networks continued to grow pretty strongly there. Same profile on MoMo monthly active users. We did quite a lot of work to clean up the base, reduce some of the incentives around commission. We don't count wallets now that are ceded but are not active. So a cleanup of the base has resulted in more muted growth on the base, but actually transaction volumes as well as transaction values continue to grow, so much higher quality growth, which we are very happy with. In terms of the financial highlights, I won't dwell on them too much. Tsholo will cover. But maybe to pick on a couple of KPIs. Service revenue at 13.8, getting much closer to our guidance range of 14 to 16, when we say mid-single digits. And again, a tale of 2 halves. The first half, service revenue was about 12.2; second half, 15.5. So starting to see an acceleration coming into the second half and driven by data and fintech. You see the growth levels there. In terms of our earnings, we often shine or put the focus on adjusted headline earnings, which we see as a measure that gives you a sense of underlying earnings momentum in the Group. It's still down just on 32%, mainly driven by the sharp devaluation of the naira, and the sharp devaluation of the naira generating, obviously, less reported earnings as we consolidate them up at Group. I mean Tsholo will show a slide what, if you were to normalize for translation effects, actually, the business is looking very, very solid. The balance sheet, Group leverage remains very comfortable at 0.7x, and Tsholo will take us through also the maturity profile that we have on our debt. That's all looking very comfortable. And the mix of debt that we have now, a lot more ZAR, rand debt, and we have a stub of 2026 bonds that are due for maturity back end of next year that we are applying our minds to. But that's a -- we're in a very comfortable position right now in terms of the mix there. And then as I mentioned, the dividend at ZAR 3.45, the operating free cash flow, as Tsholo will show that, again, a tale of 2 halves where we really had free cash flow accelerating coming to the second half given the effects of the first half. But going into the markets, let me start off by making some comments about South Africa. And we headlined that South Africa had a resilient performance, service revenue growing at 3.1%. The EBITDA margin back in range at 37.4%, and well done to Charles and the team for ensuring that the expense efficiency initiatives take root. Pretty much half of the expense efficiency program savings we've achieved have been in South Africa. So South Africa has done a lot of the heavy lifting to manage the expense base and support actually the earnings and cash flow coming up. The context of South Africa was that actually the macro was relatively benign. And in many respects, we started seeing inflation moderate, even though it's at a lower level. The consumer in South Africa in the near term has been buoyed by tapping and having access to two-pot retirement system. I think in the short term, that creates a bit of liquidity. But long term, you can have a different point of view around that. So the consumer was relatively in a better shape. And we saw that pretty much in our postpaid business, the postpaid results, were pretty solid. Enterprise was solid. We saw good growth also on fintech and digital. Our key challenge has been to see the benefits of our price-ups in prepaid. They haven't come through as of the end of the year. And as we sit today, we are still working through those. And that's probably the one area that we'd call out that we didn't meet our own expectations in terms of delivery. But when you look at the other areas, the network, we rolled out ZAR 9.8 billion of CapEx, ZAR 1.5 million of that was network resilience investment. The network resilience investment is complete. And actually, in the last couple of days where we had some load shedding, we actually saw that the network is delivering very high levels of availability even when we experience Stage 3 load shedding several days back. So as I mentioned, service revenue at 3.1. As we exited the end of last year when we do our NPS measurements, seeing a leading NPS position as we exited Q4. Nigeria, Karl is in the room, for those who are on virtual platforms, you can't see him, he's right in front here. And Nigeria released results a couple of weeks back. And again, the story there is really around the sharp devaluation of the naira. And we did see easing inflation towards the end of the year. We had to deal with quite a lot of regulatory issues in Nigeria last year. The NIM/SIM was one, but there were spectral -- spectrum renewals we had, as well as new spectrum that we acquired to give our network the capacity and headroom that we needed. The big activities in Nigeria was executing on the 5-point plan that we've communicated to shareholders at the EGM in May of last year. We had a very clear plan and said, if we execute on these 5 levers, we would end up the year in a much better place. And thanks to the execution that's been done by Karl and the team, we are actually -- we exited the year on a much stronger footing. Having had the renewal of the tower contracts with ATC and IHS, we reduced the LC exposures. We started the year with about $400 million and ended kind of with a relatively de minimis amount of about $20 million as we work through all the outstanding obligations there. And obviously, importantly, now we have the tariff adjustments approved at the beginning of this year, 50%, that we've started to implement. We haven't completed the implementation. And that all supports our view in terms of us bringing back the guidance for Nigeria. And the outcomes there, very strong service revenue growth, 35.6%, above the guidance. Data traffic, very strong. So you see a very healthy yield of data traffic to service revenue growth in Nigeria. And we did make -- maintain our network leadership in Q3. We thought we had lost network leadership because we had been very strict around SIM/NIN registration and deleting subs where we didn't have the NINs. That affected NPS in Q3. By the end of Q4, we were back in the leadership team. So a very strong set of results underlying in Nigeria, notwithstanding the macro effects, which we're beginning to see easing. And importantly, Nigeria eked out a bit of a profit in Q3, and then we saw also a profit in Q4. Still needs to work through the negative equity and distributable reserves, and we can talk about that in Q&A. In the rest of the markets, just to highlight and, obviously, SEA really powered by the results of Uganda, and Uganda came out with these results last week. And we also see WECA very much powered also by Ghana. So in both regions, SEA and WECA, a very strong set of results coming in for both data and fintech. And to those teams, we have VP, Yolanda, also in the room, who looks after our SEA region. MENA is a story around Sudan, basically where we had very challenging operating conditions given the ongoing conflicts. The humanitarian conditions there are very dire. And we're doing our best to keep our network up and enable as many people in Sudan to stay in contact with loved ones. But as the year went on, and obviously, inflation picked up, inflation was getting close to 300% in Sudan, and the war conditions. Towards the back end of last year, we started seeing, particularly in the east towards Port Sudan and coming back to Khartoum that we're able to get some of our sites back on air, and we started seeing an improving trajectory the second half of last year. And even at the beginning of this year, we're beginning to be able to get some of the sites back on air, particularly in Khartoum, which used to be 70% of our earnings. So the big issue there has really been around Sudan. On fintech, as I said, better quality growth that we're seeing when you translate it into revenue and earnings. So we've been very focused on improving the commercial monetization, advanced services, big push on bank tech and opening up more remittance corridors. We saw advanced services going up by 52% within -- and they comprise now about 30% of total service revenue. So very pleased with that. And as I mentioned earlier on, good transaction volumes and value beginning to come up in the business, pushing ahead with the commercial rollout of our agreement with Mastercard on virtual and physical cards, and we started deploying those in a couple of markets, and happy to talk about that. In terms of portfolio optimization and ARP, as I mentioned, localizations are completed. The 2 localizations of Ghana and Uganda bring about ZAR 2.5 billion of proceeds. And now we've met the various thresholds for both Uganda and Ghana. So as far as the statutory required localizations, pretty much done now. We had signaled to the market that, over time, we would be looking to sell down because we want more locals participating in the fortunes of MTN Nigeria. That 11% is still out there, as is Cameroon's 10%. So those are the sell-downs that are still to be executed over time. And on portfolio optimization, as I mentioned earlier on, we've completed the exits of Afghanistan and the 2 Guineas. So a lot of progress there. Creating shared value is part of Ambition 2025 where we're saying ESG is at the core. And we basically have 3 areas that we're executing and tracking performance. The first is, under E, putting a focus on greenhouse gas emissions, and off a baseline of 2021, looking to improve and reduce the greenhouse gas emissions. So you see a very good score of 46.2% reduction against that baseline. Now within that, there are some of the previously Scope 2 -- so Scope 1 emissions that have actually now moved to Scope 3 when we did the SA Tower deal with IHS. So I mean, the 46 is actually the results, but it flatters a little bit, but it's still good growth as we push towards 50% by 2030. Broadband coverage, good progress, 93% almost there. And we're targeting to get to about 95% by the end of this year. And so part of our CapEx budget that we have for this year is really to improve coverage to meet that target of 95%. And then diversity and inclusion, which is important to us as MTN, the key metric we look at is women in the organization. Again, made good progress. Three years ago, we were at about 39%, so we're at 43%, almost 44%. So still some work to be done. And actually making very good progress in some of the areas below that headline number. So we measure women in tech within our organization, and that's been going really well. And actually, we've now upped it as we go into the years that come ahead. So really good progress around the main KPIs we focus on ESG. And obviously, one of the things is, do we reduce the cost to communicate? And actually, that's on a blended basis come down just almost 11% across our markets. Before I ask Tsholo take us through the financial results, and I'll come back with outlook and priorities, how are we doing against the medium-term guidance that we have committed to the market? So on Group service revenue, pretty much there, 13.8. If we exclude Sudan, it's 14.4, so pretty much back in mid-teens, and the second half of last year was 15.5. So you see that acceleration coming through. South Africa, I think we are ticking the boxes in pretty much all the barriers. Prepaid is where -- that's bring us down a bit and not enabling us to meet our 4 to 6. But the other area is growing on very nicely. So Nigeria, fintech, the HUDCO leverage, asset realization and the ROE was obviously affected by a huge chunk of Nigeria earnings that used to be translated at 400-odd, now being translated at 1,500-odd. So that actually has been the big impact on the ROE. So good progress, and let me hand over to Tsholo to take us through more of the numbers, and I'll be back for outlook and priorities.

Thank you very much, Ralph. A very good afternoon to all our guests, MTNers online and in the room today. It is really good to see you all again, and I'm very pleased to present to you our financial performance for the financial year 2024. We are really encouraged to see the resilience and momentum of our financial results, which were achieved under a very tough macro and operating circumstances. So if I can just take you through some of the key financial messages from our financial performance, 5 key insights. Firstly, as you can see, we continue to manage the macro impact on our financial results. However, we notably saw a moderation on the effects of -- in the effects of our numbers in the second half, and these were really headwinds that abated in H2. Secondly, we are pleased to report a positive underlying trajectory in our service revenue growth as well as EBITDA margin. It demonstrates the strength of our operations underpinned by effective execution. Additionally, which is really the third point, was we continue to execute well on our expense efficiency program, and I will share with you later. This program has really helped us to cap the effect of the macro environment, enabling us really to defend our margins. The fourth point, on the screen, is that we have also been very strong -- seen very strong trends in terms of free cash flow and our leverage metrics in the second half of the year. These improvements have aligned with our commitment to the market to really reinforce the strength and flexibility of our financial position. Finally, just to reiterate, is that we have remained disciplined in applying our capital allocation framework, and it really underpinned our performance and ensured that we are making strategic investments that drive long-term value. So if I can just give you insights into the positive momentum in the second half. As Ralph indicated, you will see the trends on the screen on our key financial metrics. I will speak to these throughout my presentation. But as you can see, our service revenue growth accelerated in the second half to 15.5%, including MTN Sudan, which started to show more encouraging trajectory. But overall, a very pleasing acceleration relative to the 12.1% that we reported on in the first half. In terms of EBITDA, H2 much stronger than H1, again, with overall margin improving to 39.9% compared to the 36.5% that we reported at interims. The strong operating performance in H2 is really reflected in our P&L with adjusted headline earnings per share of ZAR 4.43 in the second half compared to ZAR 3.73 at interims. Similarly, operating free cash flow, as you can see, and this is before spectrum and licenses, was much stronger in the second half, coming at ZAR 21.5 billion versus ZAR 9.9 billion in the first half. And this underpinned the cash upstreaming, which was much stronger, which ultimately supported also the HUDCO leverage that came in within our guided 1.5x, where we achieved 1.4x, and an improvement from H1 as well as our Q3 results. So overall, on this slide, we show a very strong exit from a financial perspective, which I think puts us on a strong footing as the new year unfolds. So just to take you through some of the financial performance, and before I do that, very briefly on the significant items that have impacted our results, again, which Ralph touched on. Firstly, from a macro perspective, starting with the FX volatility and notably the devaluation of the naira. This had 3 significant negative effects in our financials, namely upward pressure on FX, blended inflation impact as well as the FX losses coming through the finance charges line. But also importantly, so is the translation effects in terms of the conversion from local currencies to our reporting currency, the ZAR. Secondly, just in terms of the key macro, we recorded a loss amounting to ZAR 300 million from MTN Sudan where business operations were negatively impacted by the ongoing conflict in the country. And then in terms of other significant items that impacted the reported results, there were about ZAR 1.3 billion in gains from disposal of Afghanistan as well as Bissau, but losses on disposal of Conakry of about ZAR 1.9 billion. Finally, we had impairments in particular from Sudan of about ZAR 11.7 billion, including also [ IO ] that we took an impairment of at interims. So just taking through the salient points of our -- from our Group income statement. Really at high level, we saw a decline of 15.4% in terms of service revenue on a reported basis. But in constant currency, as indicated, 13.8% year-on-year, which was within the corridor of our medium-term guidance. And I'll unpack this in a later slide. Reported EBITDA declined on a reported basis by 33.5%, but EBITDA before once-off expanded by 10.2% in constant currency. And this was achieved in spite of effects of OpEx from elevated inflation and local currency weaknesses across most of our markets. In constant currency, we managed to limit the decline in EBITDA margin to 0.8 percentage points, with a full margin of 38.2% in constant currency. I've already highlighted the meaningful improvement in the second half with margin at 39.9%, which really bears reiterating. And this actually included MTN Sudan. So moving on to the finance costs. Briefly, these were lower by 10.9% year-on-year to approximately ZAR 35 billion, and I will unpack this later again. The share from associates and joint ventures was up 116% year-on-year, and this is in constant currency. And within that, there's a benefit in our JV from a change in the treatment of regulatory fees, which moved from OpEx to CapEx following regulatory amendments in the industry. Income tax expense declined by 12.4% due to lower profits, mainly driven by losses recorded in MTN Nigeria as well as Sudan. So just moving on to the next slide -- sorry, on the same slide, you will note a big movement in the profile of a noncontrolling shareholder specifically. And this was mainly due to higher losses in Nigeria as well as Sudan, which were attributable to minority shareholders in those operations. I'll come back really to the per-share performance later on. But just wrapping up with return on equity, our adjusted ROE came in at 18.8%, which was down from 24.4% last year. And this was largely due to lower earnings base, which was impacted by the macro, as we indicated. So if I can unpack in the next slide the Group service revenue in a little bit more detail. I already mentioned 13.8% in constant currency. But if we exclude Sudan, this was more like 14.4%. Already also noted the tick-up in terms of H2 momentum with service revenue growing 15.5% in the second half. If we exclude MTN Sudan, this was slightly lower at 15.3%, demonstrating the improvement in South Sudan in the second half of the year. Coming back briefly to the main revenue bearers, you notice that voice revenue was relatively steady, growing at 0.5%, largely from solid growth from both Nigeria and Uganda. And the resilience in voice was also supported by base growth as well as our CV initiatives implemented in the market. Data continues to be the largest contributor of our Group service revenue, expanding by 21.9% year-on-year in constant currency. And this was also underpinned by strong data traffic demand as well as growth from our core across our markets. And this continued upside was enabled by the ongoing investments that we continue to make on our network. Fintech continued to show good growth overall, with service revenue rising 28.5%. And it was also pleasing to see the strong performance in the likes of digital service revenue growing by 19% year-on-year. And in other bucket is SMS, bulk SMS, IT services, ICT services, that grew by about 18.7%. So coming back to the H1 versus H2 theme, most of these revenue segments accelerated growth in constant currency terms in the second half of the year, as I showed in the previous slide. And maybe just to provide an illustrative view of service revenue normalization, which we really first presented in the first half, so to complete the picture here for the full year. It is really just an illustrative view of our service revenue if we had to adjust for the macro impacts on our business. Notably, these include Sudan, conflict, hyperinflation in Ghana as well as South Sudan. So this view also shows the effect of local currencies devaluing against the ZAR, particularly the naira. So if the impacts of these macro headwinds are adjusted for in both the current year as well as the prior year, you would see that underlying Group service revenue would have been just shy of 19%. So I think this really highlights the very strong underlying trend, and I will touch on a similar slide when I talk to adjusted headline earnings per share later on. If I can just move on to our market performance, briefly starting with South Africa. Starting the business, delivered service revenue growth in South Africa of 3.1%, contending really with the evolving customer behavior and increased competitive intensity, especially in prepaid. In terms of the key segments, MTN South Africa sales revenue was really driven by data revenue growth of 2.9% year-on-year, notably with accelerated year-on-year growth of 3.5% in second half and 5.5% in Q4. Digital revenue growth was 10.6%, very strong, supported by rich media services and mobile advertising, while fintech revenue was up 47%, which is really coming from a time advance growth. Other revenue, which includes enterprise ICT and bulk SMS, was up 20.4%, mainly from new deals in enterprise. The growth in these verticals were offset by the voice decline, which was down 4.6% year-on-year, although reflecting a significant improvement in trend, particularly when you compare to 11.9% decline, same period last year. This outcome was supported by improved network availability following the completion of the network resilience program in South Africa. And then wholesale revenue really remained flat year-on-year. Just quickly on the expenses profile. These were very well managed, again, with total cost growth contained at 0.2% year-on-year. We saw cost of sales growing at 1.8%, largely driven by interconnect as well as device costs, while operating expenses movement benefited from a profit write-up resulting from lease amendments. However, a dedicated focus on expense efficiency program in South Africa really underpinned well-managed cost overall with ZAR 1.2 billion in expense efficiency program, resulting in really just 1.2% decline in cost, in operating expenditure. EBITDA adjusted for the disposal of sale and leaseback on towers was at 5.5%, however, expanded 4.4% if we further adjust for the disposal of the sale from insurance receivables. The margin, excluding the gain from disposals and insurance receivables, was at around 37%, which was really up 1 percentage point as well. So on this basis, MTN SA's EBITDA margin in H2 was really at 38.2% compared to 36.5%, demonstrating really an encouraging improvement in the second half of the year. And then finally, when we look at CapEx, MTN SA deployed ZAR 9.8 billion, excluding leases in capital expenditure, focusing on the completion of its resilience network program that we reported earlier in the year as well as improvement in capacity as well as quality of the network, with CapEx intensity of 18.6%. Now if I can turn to Nigeria briefly, and I won't go into the detail. I think most of you will have seen the results at the end of February that were reported. But firstly, just to reiterate, service revenue, very strong delivery at 35.6% in constant currency, in line with prevailing average inflation and also the medium-term target. The growth was really quite broad-based led by very strong growth in data revenue, but also supported by solid performance in voice. The second point on expenses, really just to reiterate 63% growth in constant currency terms, reflecting the naira devaluation effect on hard currency costs as well as high inflation and network and energy costs in the country. There was also the effect of a new vet on leases that was introduced in September 2023 having a full year impact on the 2024 numbers. MTN Nigeria successfully renegotiated its tower lease agreements and was able to realize savings of ZAR 1.3 billion in OpEx. Thirdly, the EBITDA margin outcomes reflected really the top line that was strong and the impacts of the effect, as I've just outlined earlier on. EBITDA margin declined, however, by 10.3 percentage points to 38.9%. So if we adjust for the net effects of ForEx, for instance, EBITDA would have grown by more like 52.6%. Fourthly, just MTN Nigeria spent about ZAR 5.2 billion in CapEx. You will recall that we had communicated a reduction in CapEx earlier in the year, which really resulted in a lower CapEx intensity of 12.7%. The lower CapEx was part of the proactive initiatives that we had communicated to manage cash flows as well as U.S. dollar-denominated obligations. If I can just touch on the market. This is a new slide that we're now showing given the importance of our portfolio. You will notice that our market portfolio performance showed resilient top line growth with service revenue increasing by 21.3% in the SEA region and WECA growing by 9.7%. Both were ahead of their respective blended inflation rates. Within those regions, I think it is also worth calling out at high level MTN Uganda as well as MTN Ghana results as these contribute 13.5% and 23%, respectively, to Group EBITDA. Within SEA, MTN Uganda increased service revenue by 19.6% with a healthy margin of 52%, which was really supported by solid commercial execution and a stable macroeconomic environment. In the WECA region, from a Ghana perspective, service revenue expanded by 34%, growing ahead of its medium-term target. It also sustained a healthy margin in the upper 50%. You'll see from this slide that both these operations are sustaining their pleasing trajectories of growth and profitability, and they remain critical to the growth of our business in terms of value creation. Just moving on to fintech. Revenue grew by 28.5% in the period as we continued to scale this business. Pleasing was advanced services, which grew by 52% year-on-year, in line with our strategy to really accelerate these segments of our fintech operations. Basic services as well as airtime advance revenue was also -- were also robust, increasing by 23% and 19.1%, respectively. As you can see on the right-hand side, the contribution of advanced services continues to improve with now making up 25% of the total fintech revenue stack. And this is an increase of 4 percentage points from the previous financial year. Just going into the next slide, if I can touch on the Group expenses. These were well managed given the challenging macro context. Total expenses grew by 14.5%, with Group cost of sales growth contained at 6.3%. Within that mix, commissions, roaming as well as ISP costs were higher, offset by the benefits of a device transformation program that was implemented in South Africa. OpEx increased by 21.8% with the main driver being network rent as well as utilities. These costs grew by 45% year-on-year. A big factor in this trend was the FX impacts that I mentioned earlier on our -- on the tower leases in Nigeria. So if I come back to H1 versus H2 trends, again, overall costs rose by a lesser 8.9% really in the second half compared to 20% in H1. So it also speaks to also the easing of the macro headwinds that we are seeing such as FX and inflation. In terms of the expense efficiency program, we remain committed to continue unlock efficiencies to support earnings, cash flows as well as returns overall. During the period, we realized total savings of ZAR 3.8 billion of the ZAR 7.8 billion over the 3-year period, which is a target we've already communicated. And this ZAR 3.8 billion includes savings of ZAR 1.3 billion from the renegotiated towers in Nigeria. Geographically, you can see that 31% of the savings came from South Africa and 45% of that came from Nigeria, followed by WECA as well as SEA, respectively. By cost category, our EEP savings were largely realized in network and IT, which made up a combined 69% contribution with sales and distribution contributing about 26%. So we are pleased with the progress thus far that we are making in our expense efficiency program. And as mentioned, this is a target that we continue to drive over the 3-year period, which we started last year, to 2026. If I touch on now on the profile of our finance costs. Net interest paid, as you can see, was slightly lower in the period at about ZAR 8 billion. It reflects some debt repayments as well, mainly in Nigeria as well as Uganda, as well as a reduction in the -- average cost of our debt at now 11.8% from 12.2% last year. The finance lease costs were up slightly due to lease extensions and renewals that we had, although mitigated by weaker local currencies against the ZAR. So overall, you see our net finance costs before FX holding steady at around ZAR 15.9 billion. I'll just make 2 additional points here, is that just to emphasize the point, in terms of the improving trends that we are seeing in the second half when you look at the movements in our finance costs. So secondly, I think the big call-out here to make is the FX losses in the period, which amounted to ZAR 18.9 billion. This included a total of ZAR 14.1 billion in FX losses due to the naira devaluation in Nigeria. You can see the split there between realized and unrealized losses, and the sharp rise in the former was really due to the settlement of dollar exposures, particularly in Nigeria. So just moving on to our adjusted headline earnings per share. On this basis, attributable earnings per share moved into a loss of ZAR 5.31 per share, reflecting the lower earnings and all the largely macro-driven effects that I unpacked earlier on. The big item impacting there, you will see, was mainly the impairment of goodwill, PPE and associates totaling ZAR 5.78 per share, which was largely coming from the MTN Sudan impairment that I mentioned of ZAR 11.2 billion. So reported headline earnings per share came in at ZAR 0.98, down from ZAR 3.15 per share last year. Again, I've already spoken about most of the effects impacting that performance. They include hyperinflation, FX losses as well. And really, the latter amounted to nearly ZAR 6.00, of which ZAR 3.99 came from Nigeria. There are also the deferred tax charges and other nonoperational items, which totaled ZAR 1.04 per share. So adjusting for all these nonoperational items, you see that our adjusted headline earnings ended at ZAR 8.16 per share. As I indicated, I will just give an illustration as well, again of the normalized adjusted headline earnings per share that were impacted in the main by the translation impacts that I mentioned. And also, if you had to adjust for Sudan in addition to those FX adjustment, you would see that, when you do the normalization, would have seen a significant improvement in our adjusted headline earnings per share. And this is really to illustrate the underlying health and strength of our core performance overall, were it not really for this external factors that have impacted on our financial performance. Moving on to CapEx. We capitalized in total ZAR 29.9 billion excluding leases. This was within the guidance that we provided to the market of between ZAR 28 billion to ZAR 33 billion, with CapEx intensity of 15.9%, also within the medium-term target that we communicated of 15% to 18%. By markets, 33% of the CapEx came from South Africa as they completed the comprehensive network resilience plan. 17% came from Nigeria. As I indicated, we had reduced CapEx in Nigeria earlier in the year. And then a combined 44% of our CapEx came from SEA as well as the WECA market as they continue to invest for growth in those regions. And then by category, as you can see, around 73% of our CapEx went towards network investments and then the balance was more into IT and other areas, which also includes our platform businesses. So we do continue to invest and deploy our capital expenditure in line with our capital allocation framework to support the growth of our businesses as we execute on our strategy. If I can move on to our free cash flow analysis. From the waterfall, you can see that the operating free cash flow before spectrum and licenses declined by 31.6% to ZAR 31.4 billion. This is largely reflecting the pressure on earnings, as I've discussed, as well as a net working capital outflow of ZAR 7.8 billion. In the main, this was higher due to trade receivables in various of our businesses, particularly SA and Nigeria, but also the prepayments that we make to try to mitigate against FX volatility in our markets. We also made cash payments for leases and as well as capital expenditure of ZAR 9 billion as well as ZAR 30 billion, respectively. What was really pleasing about this outcome was also the cash flow of ZAR 21.5 billion in H2, demonstrating a strong uptick from the cash flow of around ZAR 10 billion or ZAR 9.9 billion in H1, which I showed earlier. So as we even look at the shape of our free cash flow analysis, it's a similar profile that speaks to a stronger upswing in the second half. If you recall that we had negative working capital at H1 of about ZAR 2.4 billion and, therefore, a positive swing in free cash flow of ZAR 8.4 billion, thus, ending us with ZAR 6.6 billion in free cash flow. So if I can just go to our leverage and liquidity before I conclude. Firstly, as you can see, our balance sheet remains strong with Group net debt to EBITDA at 0.7x, slightly higher than the prior year, but still well within the loan covenant limit of 2.5x. Secondly, our HUDCO leverage remained unchanged at 1.4x. We are particularly pleased to see this outcome as well given the volatility that we've experienced in our macro and, as mentioned earlier, also reflecting an improvement from H1 as well as Q3. We did communicate that we expect to see a trend back to around our medium-term threshold of 1.5x. And then on the foreign currency denominated debt, it totaled 21% of HUDCO debt, well below the target of 40% that we had communicated. And this is really a demonstration of our forecast in terms of faster deleveraging of the non-rand debt. Thirdly, HUDCO leverage was also anchored by the strong cash upstreaming that we received from the markets. In the second half, we got ZAR 1 billion more than we did in the first half. So overall, in total, we upstreamed ZAR 14 billion for the year, with ZAR 7.5 billion in the second half. We also received additional proceeds from the Ghana as well as Uganda localization of about ZAR 2.5 billion, which is in addition to the cash upstreaming of ZAR 14 billion. On HUDCO liquidity headroom, it remained healthy at ZAR 41.3 billion, with ZAR 19.9 billion in cash balances and ZAR 21 billion coming from undrawn committed facilities. So very strong liquidity profile at HUDCO level. I think the final point here to make is really on the debt maturity profile. The market remains supportive -- the debt market remains supportive to the Group. And we have been successful in refinancing our maturity debt under the DMTN note program as well as the bank loans overall. And we're exploring options for the -- relating to the maturity of the Eurobond 2026 that comes up towards the end of the year, next year. And I think Ralph did touch on this specifically. So overall, our balance sheet remains very strong and continues to provide the flexibility that we need to drive our growth as well as our strategic priorities. And in that regard, our capital allocation program remains very relevant for us and it has helped us as well to stay through some -- steer through some of our challenging macro conditions. So in summary, the financial performance for 2024 demonstrated underlying strength and encouraging H2 trends, as you saw earlier, and momentum, particularly in service revenue earnings as well as free cash flow generation. As I've discussed, this effect has translated well into our balance sheet development. And we remain focused on delivering value for our stakeholders throughout our disciplined financial management. Ladies and gentlemen, that ends my presentation. I will then hand over to Ralph. Thank you.

Thanks very much, Tsholo, for taking our guests and investors through the details of the financials. A couple of comments from my side before we go into Q&A. As we think about the outlook, I mean, I guess, the macro outlook, at the global level remains relatively uncertain as one tries to assess what is happening really around tariffs and some of the geopolitical developments. They have a way, even though they are far from us, to have second-order impacts that may affect us or remaining alive to them. I mean I guess one of the short-term impacts we need to assess is really what happens with the pullback of aid funding, particularly from the Global North, in some of our regions that actually depend on quite -- on some of that funding that has been pulled, and the fiscal hole that now needs to be filled. I guess that's something that we need to assess what happens in the next couple of quarters. But if one looks at the last couple of months of the year that we've been in, as well as the outlook, certainly, it looks like it's a period that we're going into where inflation is more benign and actually trending down. In Nigeria, they've actually rebased inflation. So you'll see on the chart there, we haven't put because we are trying to assess what the re-based inflation and the outlook looks like, but the general trend is inflation abating. And currency is relatively less volatile than the period passed. So good economic growth seen across many of our markets. Currency is relatively stable forecasted both for the period of this year and into next year. And as I said, inflation beginning to taper down, which is, as you all know, our economic engine starts with service revenue above inflation to drive real growth. So as inflation eases and we start seeing our service revenue improve, that is positive for us going forward. This chart, you are very familiar with, which we started at the end of COVID just to assess the demand for our services by just looking at traffic. And you see those patterns continue to be structural in the sense that the demand is not plateauing. It's still growing very significantly. As we look at the year ahead, a couple of priorities that we have -- that we'll report on as we proceed. So on the operational commercial momentum, in South Africa, a couple of focus areas. Focus on prepaid. As I mentioned, the other areas, postpaid, enterprise, digital wholesale, that's kind of all holding up. We still need to see the uptick on prepaid to support service revenue growth. The EBITDA margin achievement and free cash flow generation as well as the cash upstreaming from South Africa has been pretty solid. So to Charles and his team, we want them to sustain that. So the big work to be done is really seeing an acceleration on prepaid. We have a very nuanced understanding of where the issues are in prepaid. One can think about the country of South Africa. But when you look at it and you break it down into regions, provinces, so we know the provinces that we're doing well and the provinces that we need to do a bit more work on to uplift the prepaid growth, that's not where we want it to be. And just in Nigeria, for Karl and the team, implementing in a sustainable way the tariff increases. We haven't just gone and put a headline 50%. We have to watch competitive dynamics as well. And so Karl is here, he will tell you that he's not through -- working through all his bundles and offers in terms of the tariff increase. So more of this to come. But that should help sustain service revenue growth in line with our guidance, that we should see a lift up in Nigeria in particular. And then we've got good momentum in the markets cluster, Uganda doing well, Ghana doing well. And a couple of markets where we want to see recovery, Cote d'Ivoire is one. And then I think we'll see on Rwanda recovery now that the MTR has been put back into place and will start helping us grow on the earnings side. Fintech is all about expanding the ecosystem. We're seeing good growth. We're focusing on higher-quality growth, removing significant or excess commissions. And again, doing much more -- less seeding into wallets to start getting the transactions and the transaction volumes to pick up. So a big focus there. And then on advanced services, launching MoMoAdvance, our bank tech product, to more markets is a key area. MoMo PSB in Nigeria has been a disappointment for us, and we're reorienting our own strategy towards that, and I guess we'll have more to say about that as we go into the second half of the year. There, I think you can really anticipate that we'll have a lot more to say about MoMo PSB in H2. As Tsholo mentioned, expense efficiencies, we did ZAR 3.8 billion. We've still got to go away towards the ZAR 7 billion to ZAR 8 billion. For the year that we're in now, we're looking at CapEx ZAR 30 billion to ZAR 35 billion, so it's a bit of a range, not too dissimilar to the CapEx envelope that we had last year. So we will push the growth and look to be very, very efficient with our capital deployment so that we support the improvement of returns. Sustaining cash upstreaming, both dividends, management fees across our markets. And then looking at our balance sheet and looking at it into the future. And as Tsholo mentioned as well, looking at what we do with our eurobonds that mature at the back end of next year, about $500 million of eurobonds. We have not made a decision as yet. We're looking at sources and uses of capital. And we'll apply our minds in the second half of the year, what we will do given the various options that we have. And I guess, importantly for us, a sustained performance from Nigeria, where we start seeing profitable growth month-on-month should really go a long way to resolving the negative equity position that we have and building up the distributable reserves. Because you need the distributable reserves built up to a particular level to be able to distribute dividends. So we've got to fill that whole of earnings and then distributable reserves to be dividend paying. And you can all do your maths and forecasting to anticipate where that is more likely to be under current macro assumptions. So thanks very much. Again, on our HUDCO, on our medium-term guidance, we remain with our medium-term guidance. And as I said, Nigeria, importantly, we're calling out a FY 2024 guidance -- 2025 guidance wit service revenue at least mid-40s, margins at least mid-40s, and obviously, would like to out-execute that for the year. And then the dividend, anticipated by the Board for this year payable next year, would move from ZAR 3.45 to ZAR 3.70 per share. So thanks very much for listening to Tsholo and I. Hopefully, that helps you digest what came out in our extensive SENS and our financials. And we're ready to take up questions. And Thato will be the driver of managing the Q&A. But Tsholo, please come up on stage again.

I thought there'd be a little bit of an applause there for the presentation. But thanks very much, Ralph and Tsholo, for the presentation. I mean just to give you a guidance to how we'll kind of proceed. We will probably have questions just until after 5:00. I think the TV broadcast ends at 5:00, but we are still live on the other platforms that I mentioned earlier. So let's just get into the questions, and we can start in the room. And I see there's a lot of interest. So we'll just start.

Jonathan Kennedy-Good from Prescient Securities. Just interested in that one slide you had up there which intimated your Group earnings would have been ZAR 18, which would have been a record by some margin. Was that after holding currencies constant on the income statement and balance sheet? And is that a kind of target for where you would be over the next 3 years, for example? So that's question one. And then number two, on Iran, it looked like that was about 30% of the earnings, and there was a massive change in accounting policy for that revenue share agreement there. Just trying to understand why you would capitalize a revenue share agreement, and what's changed in Iran? And is that a new base going forward? Obviously, Iran looks very profitable now.

Yes. So should I go ahead or you want to take it?

No. Can you just take those ones?

Okay. Yes. So I mean on the first one, it's really on the service revenue line, and it's essentially the translation impact. So if you were to translate our revenue, for instance, seeing Nigeria was the biggest one at prior year rates and comparing that to current year rates, that's -- essentially that's translation impact. So what we are saying is that had it not been for the FX from a translation perspective, we would have seen an increase of 18%. I mean we're maintaining our guidance of at least mid-teens, so it's not giving any signal that this is where we're going. So our guidance remains. And then on the second point, in terms of the -- so obviously, from the regulatory requirement perspective, we've got 3%, which is -- of revenue, which is universal service obligations. There's always -- there was also a revenue share from that perspective. So part of the regulatory change was that we needed to obviously put about, I think, 3% -- between 3% and 4% of that towards investing for growth into those. So instead of paying those regulatory fees, which the government would have used towards accelerating growth. We used to pay that and it's across the whole industry, and that would have been a provision that was raised in the previous years. So that is really turning from OpEx to CapEx. Because as we roll out -- as they roll out in the market, that is they're keeping their assets in their books and not necessarily having the regulator or the authorities do it themselves. So that's the change essentially on that. But besides that, I mean, there has been good growth in the company relative to prior years.

Nadim Mohamed with SBG Securities. Just 2 from my side. If my numbers are correct, it looks like your CapEx in South Africa, in terms of guidance, will drop significantly from about ZAR 9.8 billion to about ZAR 6.3 billion. Just wanted to understand, in terms of your overall strategy, I mean, in the last quarter, it does appear that you've lost share to some of your peers. Would that be enough to support sort of acceleration in data growth more in line with what sort of industry is right now?

Yes. Please speak, Jon.

It's Jon Bradley from Absa Capital. Just first question also on South Africa, and I guess building on what Nadim is asking. So what gives you confidence around South Africa's recovery, particularly in the prepaid segment going into FY '25? And then second question is just on the fintech business and the Mastercard deal, given that that's potentially coming to a close, could you look to sell additional minority stakes this year or in the near term?

It's Preshendran from 361. I've got 3 questions.

Maybe just hold your questions. Yes, there's a few questions. We'll come back to you. Let's get the first question. No, I'm saying you'll ask them after. We already had like 6 questions. So let's -- 3 will make it 9.

So on the CapEx for South Africa, I mean, we did ZAR 9.8 billion. And in that ZAR 9.8 billion is ZAR 1.5 billion for resilience. We finished our resilience program in Q1. So kind of expansion kind of growth CapEx is you want to deduct the 1.5. And our sense is that with the South African network, and Charles can add to this is that that's ZAR 9.8 billion less what you can imply is the resilience CapEx, you can sustain your network growth. We're going to be measured around 5G rollout. We're not trying to win the prize of getting 100% population coverage on 5G. It's difficult to monetize. We're going to be very targeted around how we expand. So we think with a measured approach to kind of rolling back 5G, we should be okay there in South Africa. And on the prepaid question, maybe I'll ask Charles to cover that. Will you contradict or agree with me on the CapEx as well? Do you want to pick up the prepaid here?

Yes. I mean the point around CapEx, Ralph covered it. But there's a key point I want to make. We are 44% coverage on 5G, and fairly still a lot of headroom on the network. So we are comfortable that with the 6.5, we should build to remain competitive as we offload from 4G to 5G. So we should be comfortable with that. I think the prepaid recovery, obviously, because it's -- for us, it's largely isolated into 2 major provinces or regions. And I think in many other regions, we are growing quite decent numbers. That gives us the confidence that we are able to recover the key regions that we have lost. So I think on that basis, we believe that we'll be able to recover the prepaid business. Lastly, in the coming quarters, I mean, I'll probably say maybe H2 as opposed to maybe Q1 and Q2, maybe H2 should be able to us to see some more color on the prepaid side.

Yes. So on the MasterCard side, or the question on the fintech side, we've always said that we are open, and we haven't given ourselves a time line to own minority investments up to a maximum of about 30%. But it has to be a partnership that we believe makes sense. We're not keen to have put option structures behind these investments. Because if you do that, we could fill the booths tomorrow with 30%, I can guarantee you that. But that creates its own financial strain on the balance sheet and you're now forced to act in a particular way and you rush to IPO, whatever. We think there's no need for that. So I don't know, we'll be quite measured around that. And there's still a lot of runway and growth to be had. So we can be a bit more selective around partnerships as we go along the way there. These are all the questions.

Yes, thank you. Sorry for the confusion, Presh. Back to you.

No problem. Yes. So my questions are on South Africa, so for Dineo and Charles mainly. Firstly, your South Africa's data monetization, I calculated it at around 10%, so traffic versus the data revenue growth. I appreciate that a lot of that was the recovery of the extra time. But now that you've lapped that, I think, in November, what is your data traffic to revenue conversion rate post that? That's the first question. Then the second was, looking at your prepaid revenue, your advances are now about 40% of recharges. So it's jumped up quite a lot. How much of your prepaid service revenue growth came from prepaid -- sorry, came from airtime advance or extra time, sorry? And then linked to that is what's your bad debt percentage on that balance?

Charles?

Yes. Presh, I mean, thanks. I think on the data side, look, we did say last year they do have a pressure in terms of the bundled clawback, because remember, we said that the bundles clawback was implemented in October 2023. And then we indicated that we'll lap this off in the next 12 months, which we did in October. And in the last update, we indicated that we should start to see an upside in terms of data growth. So if you look at the performance for the 9 months of 2024 versus the 3 months, towards the end, we can see that we're closing the year on 5.5% growth rate on data. So we are getting back. And this clawback was not necessarily the entire part of the clawback investment so October, November, December, maybe coming into Q1 as well. But you are starting to see an uplift coming back into data. So the progress that we made that will restore data back to growth once we do the lap, because remember, this is a new baseline now in terms of recovery. So that is coming through in terms of the recovery for data performance. Yolanda maybe can deal with the issue of the bad debt on extra time.

In terms of the recovery rate, we find that, on average, we recover about 97%, 98% of the advances on extra time. So it's a very high recovery rate overall.

Okay. Thank you. Let's just get some questions from the webcast. There's a few on Nigeria. In Nigeria, in your opinion, is there an ideal ownership share over the long term? Would you prefer to have a controlling stake? Or would you be happy to see a drift to below controlling stake? That's one question of two. Second question, can you please give some guidance on Nigeria tariff hikes? Is there any update in terms of magnitude to be applied and the FX? And then maybe just the last question related to Nigeria, Uganda's fintech revenue growth from bank tech was quite impressive. Any likelihood of the same model being applied in Nigeria despite broad gatekeeping by Nigerian banks?

So Karl needs to help me with some of these questions. I mean on the controlling stake, I mean, we've been very clear that we would be prepared to sell up to another 11%. So where we are now 76%, you're looking at more around 65%. So in our minds, Nigeria is an important opco. We're seeking a controlling stake. It's part of what MTN is. So not looking to sell below. So maximum 11% off the base of where we are. And Karl, I don't know if you can comment, talk about tariff hikes and your views really around MoMo PSB.

Yes. So I hope you can hear me. The regulators gave us 50% approval. I think that was more than we anticipated, 30% to 40%. That's positive. Of course, it's delayed. But the additional 10% allows us to catch up. They announced on the 8 of January, and we started implementing middle of February, and that's still ongoing. What we've communicated clearly in our guidance is at least 40%, and that gives you a range of what we anticipate to come out. Now there's 2 or 3 variables. First is the timing. So it's not everything that came out in one day. It's still work in progress. Second is the elasticity of a customer. We believe looking at precedents from places like Ghana where we've had tariff increases, that it's quite strong, the necessity of telecommunication services is absolutely critical. So we're not expecting major impacts on the consumption patterns of the customer. And then finally, of course, there is the competitive effects and that's going to evolve over time. So you see some of it in the Q1 results. If you want to get a real sense of what the full impact will be, I'd say you'd have to wait for the [ Q2 ]results come through. In terms of financial services, I mean, Uganda, a great, great, great story, so much admiration for Sylvia and what she's done there, but it's a different market in Nigeria. And the greenfield territories that we had in the early days of MoMo isn't there in Nigeria. So it's going to be a significantly different model. In Nigeria, there's extensive significant digital penetration, intense competition. And there has been for years and years now the inter-switching between all financial institutions. So we have to shape our strategy to fit that market, which will still focus on growing the wallet base with a lot of focus on rural areas, introducing a competitive solution in every aspect. So that has to include things like lending, savings, et cetera. And then we'll build on that and innovate to find new spaces where it's much more of a blue ocean where we can transform the position that we have. So I wouldn't rush to jump to the optimism of what you've seen in Uganda, those are really the -- the Uganda, Rwanda, Ghana, those are the star children of MTN on financial services. It's going to be different. It's going to be a slog. But we have the competence with the Group support and the financial capacity to slog it out until we start to really grow to a scale where we can dominate that market.

Just to add to the points on fintech in Nigeria. I think the one thing that we've reflected on is not to be obsessed with a PSB license, okay? The PSB license is actually quite limiting. So we need to venture outside of that. This is what Karl is basically saying, that we need to venture out of that because the limitations on your ability to lend and other restrictions have always impact. And I think you'll see even Airtel Money, which is quite successful elsewhere, like we're successful elsewhere, have struggled to get that. So the PSB license is not sufficient to take on the likes of OPay, PalmPay and those sort of things. So that's how we're beginning to think about the opportunity. But as Karl says, much more to say at a future date.

Thank you. Any questions in the room? Okay. Let me just get a few questions again from the webcast. The situation in Sudan is unlikely to moderate and improve in the near term looking forward. What is the plan for this market? That's one question. Then there is a -- working capital questions. Working capital, a big negative in 2024. What is the outlook for 2025? And then any markets that are -- any markets that are candidate for hyperinflationary accounting outside of Iran? And what naira rates do your guidance assume? Let's start with Sudan, plans for Sudan?

Yes. On Sudan, look, as I mentioned, the conditions there are pretty challenging. Operationally, they've been a little bit easier as we got to the back end of Q4 and actually the beginning of this year. I think this year we've got another 200 sites up, at the beginning of this year. So sites, I mean, they would be able to get our customers to connect. So look, I mean, that's a challenging macro, geopolitical set of issues there. And our team are doing the best that they can to sustain the network and keep our customers connected. I mean we'll continue to monitor the situation. We've taken a big asset impairment for about ZAR 11 billion. There's no goodwill, very little to go ahead and write down there in the business. And we've been able to get tariff increases, but not sufficient to compensate for inflation. So we'll continue to monitor the situation and hopeful that the interventions from the AU and others would help to ameliorate the situation there, which is a significant humanitarian issue that probably is underreported given everything that's happened across the globe. Tsholo, do you want to pick up on the working capital?

Yes. So I mean, I think, as I indicated, it is an area that we're focusing on. There is a bit of pressure on the receivables in a couple of markets. I think the ongoing initiatives that we're making is to try and reduce that as much as possible. But there's also the, as I said, the prepayments that we make from time to time to guard against FX volatility. So the focus is really just to make sure that we reduce that as much as possible. So I mean, in South Africa, Nigeria and I think in our [ Babak] business, we probably had over 50% of that coming from the collection side. So our intention is to continue with those efforts, to reduce it and make sure that we can turn it positive.

And then any markets that look like there could be hyperinflationary in terms of accounting?

Well, I think the current markets remain. I think we continually assess Nigeria. I think you will have seen that Nigeria has gone just over 100%, but it hasn't been declared as a hyperinflationary economy. At this point, that's the only market. But we've got Ghana at this point as well as Sudan. South Sudan used to be in hyperinflation, but I think it's out of there at the moment. No other markets that we anticipate at this point.

Yes. I think with the inflation trend in Nigeria, more downwards sloping now. I mean I think that risk is significantly mitigated. I mean official inflation is 24% at the moment, and it's trending more down rather than staying steady or up.

Up. Correct.

Okay. A question on South Africa. Do you have any plans for price increases on the prepaid side in South Africa in 2025 given that the macro is improving?

Charles, you can take the question from there, if you want.

Look, I mean we said about the price increase for last year that we still want to see the effect of that to play out into the next 2 quarters. But what we're reflecting on is the impact of the VAT increase that -- it's not something we're going to be able to absorb. I think on some of the bundles, we're going to be a bit more surgical in terms of the price increases. But it will largely be driven by the VAT issue if it comes through and also what the outlook looks like in terms of the price increase that we've done last year.

Thanks, Charles. CapEx intensity nwas well-managed in 2024. Can you give us a sense of how this may evolve in the next 2 to 3 years, especially in light of the tariff increases in Nigeria. Can we maintain our network advantage without raising CapEx spend?

I mean the CapEx we are calling out for this year is broadly the same CapEx as last year. There's some shifts, a little bit more in Nigeria, more in South Africa. We're not starving South Africa of CapEx. Please don't think of it that way. We put an enormous amount of investment into South Africa. And as Charles said, we'll be quite measured around our expansion, particularly around 5G. We've always said that our CapEx intensity should remain 15% to 18% range. That's pretty much if you're modeling for the next couple of years, that's where it will be. And over time, you want it to drift towards the 15% because the service revenue is much higher. So that's kind of how we see CapEx intensity, 15% to 18%.

Now question on MoMo PSB. Can you elaborate on what your expectations for MoMo PSB were and where and why they fell short?

Karl wants to talk. I can help you.

Okay. Thanks. Nice to share the fun with Charles. Our expectations were predicated on what we've seen in previous markets. And I think the reality of the Nigerian markets were quite different. We were expecting to be heading towards the range of, by end of this year, next year, range of 20 million monthly active users. What changed? First of all, a clear understanding of the intensity of the Nigeria markets, the emergence of multiple competitors like OPay and PalmPay, the fact that the basic transaction services and cash and cash-out is a space which have been occupied and transaction services are actually effectively zero rated on-net with CBN regulated off-net transaction fees. So then the requirement for a significantly more advanced technology solution for Nigeria. So it's significantly different from what we had seen in previous markets. We've come to that full understanding now. Come to the understanding that Ralph spoke to about that. The MoMo PSB license does have its limitations and we need to look at add-ons to that license to really evolve in that market to get to where we were at. So without a doubt, we are behind our initial excitement about MoMo PSB. But we're well grounded in reality. We have the revised, revamped management team, including people from the Nigerian banking and fintech ecosystem that we've put in place, as well as the governance. And we're slowly, meticulously building on that space.

Thanks, Karl. A question on LEO satellites. Given the -- yes. So any progress with LEO satellite providers such as SpaceX, Starlink, and the partnerships that you've talked about in the past?

Mazen is here. I'm going to save myself from talking. Can you give the mic to Mazen, our Group CTO? Can't be in the room and not say anything.

Yes, we look at LEO satellite as an emerging technology. We look at it from the side of leveraging this technology for our own, let's say, backhauling capacities. At the same time, we look at it as a competing technology in the space of the home. And that's really an area where we are aggressively, with the commercial team, trying to mitigate wherever there is a threat by accelerating our home programs. So we keep the engagement with all the -- currently with all the LEO satellite partners. To some of them already, we are in the phase of, let's say, MOUs, NDAs, trying to explore the advantages and to leverage this technology for our own needs where we can really accelerate the reach when it comes to the rural areas by having the proper backhauling capacities. That's really the partnership, and that's really the leverage that we are trying to make at this stage.

Thanks, Mazen.

Thanks, Mazen. Question on CapEx as we start to wind down. How much of your -- how much will your cash CapEx be in 2025? Not the IAS 17 number, the real FCF impact? The free cash flow impact.

Yes, I mean, it should be broadly the same. We're going to be keeping CapEx within the same guidance. So that should be more or less within that range that you've seen.

And then maybe just on the financials as well. I think you both talked about a little bit earlier. How do you plan to address the 2026 Eurobond maturity?

Yes. I mean, I think as we said, we've always said that we're trying to reduce as much as possible our dollar-denominated debt. Obviously, we will assess when the time comes, it comes to, obviously, by October this year, we should have a plan because that when it becomes current, so we will assess at that time. And I'm sure we will communicate to you in due course.

Thank you very much. I think we can probably close with that question, unless there's one burning question in the room. Going, going, gone. Thanks very much again for your time. There are refreshments as I mentioned a bit earlier outside. And we will be obviously interacting with many of you over the past -- over the next coming few weeks. Ralph, I don't know...

No. No, you said it all. Thanks very much. Much appreciate it. Thank you.