Good afternoon, ladies and gentlemen. My name is Thato Motlanthe. I look after Group Investor Relations at the MTN Group, and it's my privilege and my duty to welcome everybody to our financial results for the half year, ended the thirtieth of June, twenty twenty-four. So I'm delighted to welcome our valued investors into the MTN Innovation Center, those who have come in person, as well as the MTNers in the house, as well as across all of our markets, as well as everyone who's dialed in on the various platforms. So we're live on CNBC Africa. We're on a webcast. We're also on the MTN YouTube and LinkedIn channel. So welcome to everybody. So let's just start off with the usual housekeeping items.
First and foremost, you should be seeing our standard disclaimer and safe harbor slide, and that just covers the presentation for today. And then those of you in the room, you'll be glad to know that the emergency exits have not changed. There's one to my right and one to the back of the auditorium. And then just for your convenience, we do have the Wi-Fi details that should come up on screen now, Y'ello Events. We've also got a QR code, which you can try and scan very quickly as I run through, and that should give you a download of the presentation pack for today. If we go on to the next slide, we've got the social media platforms. And if you're tweeting, we're on...
You can use the hashtag #MTNInterims24, and the Twitter handle or the X handle for MTN Group is @MTNGroup. If we move forward, and I think in terms of the last thing before I get into celebration of our thirty years, we do have refreshments for you, for those who have come in. They'll be in the usual place again, just outside of the auditorium. So, I mean, I think as we commence today's proceedings, I think it's important to acknowledge a significant milestone in MTN's journey. This is our thirtieth year in existence, and really, it's three decades of sustained growth, innovation, and creating value for all of our stakeholders and shareholders.
And really, just in terms of building on this legacy, you know, the interim results that we present today are really here to show you and offer perspective on basically our recent performance, but also how we expect to evolve the strategy going forward. So we, we're very pleased about that, and I think, you know, we'll address the challenges, but as the opportunities as well. I think it's become a bit of a theme over the past couple of results, that where there are challenges, there are opportunities, as we navigate the challenges that we faced in half one, as well as how we create value for long-term success. So with that in mind, let's just look at today's agenda. It will be the usual running order. I'll shortly welcome our Group President and CEO, Ralph Mupita.
He will run through some highlights, as well as an overview of our operational and strategic review. He'll be followed by our Group CFO, Tsholo Molefe, who will give us an overview of our financial performance. Ralph will then just come back to give you a perspective on how we think about the rest of the year and beyond. Just afterwards, we do have questions. Obviously, those in the room can ask from the floor. Those who are on the webcast can ask questions through the platform, which I'll read out. And obviously, we are scheduled for about an hour and a half in terms of this presentation. We will cut off at about five o'clock local time. Without further ado, let me welcome our Group President and CEO to the stage, Ralph Mupita. Thank you very much.
Thato, thanks very much, and my own welcome to all who have joined us here at Fourteenth Avenue. For those at Fourteenth Avenue, you'd have seen as you came into the building, we're celebrating thirty years of MTN. I'm sure you saw the display of the phones that started this mobile revolution in the nineties, or that Alcatel, you know, the various brands that were there that we don't see anymore. Nokia's the 3310 , which was a favorite for many. It's up there on display. It tells the story of the journey that MTN has been on, and as Thato said, you know, this is a year of long celebrations of MTN playing its role in connecting Africans to the internet.
We now have two hundred and eighty-eight million subscribers every day using the MTN network. I saw the very first business plan of MTN for nineteen ninety-four. The idea was we were going to have ten thousand subscribers. Ten thousand subscribers was the business case for MTN, and today, we sit having connected two hundred and eighty-nine million subscribers. I also extend welcome to all of our various stakeholders, investors, the media, broader stakeholders who have joined us today to listen to the results that Tsholo and I have the pleasure of presenting on behalf of the staff, who've done a sterling job in executing on our strategy amidst a period of a challenging macroeconomic backdrop that Tsholo and I will take you through.
Earlier today, we released the SENS, the stock exchange announcement, which gives a lot of detail. I trust that you've started to work through it. We also released a joint announcement between MTN Group and MTN Zakhele Futhi. MTN Zakhele Futhi is a key component of MTN. It underpins our transformation, our Triple B Level 1, which both Group and our SA have enjoyed over several years, and we're making a proposal to our shareholders at an EGM that we anticipate will be held around the fourteenth of October, to extend the scheme from the eight years to 11 years, ending twenty twenty-seven. More of that between now and the October fourteenth EGM date. Tsholo and I will anticipate over the next 50 minutes or so to really land six key messages.
The six key messages that we want to leave in terms of how we've assessed the performance and the outlook. The very first point is we are seeing very strong commercial momentum, you know, within our business. If you look at how we're adding subscribers, how we're seeing usage in the core connectivity business, we're seeing very healthy growth there. In the fintech business, we are again seeing very healthy growth in terms of the transaction volumes that we're seeing. Those are up 9.7 billion transactions in the period. We're seeing good monthly active usage, and then, we're also seeing the merchant ecosystem expand, and it's expanded by almost 50% to 0.3 million merchants across.
And so for both, data and fintech, which are the big growth drivers for the business in the medium to longer term, we had pleasing, service revenue growth, data 21% and fintech at 27%. So we make the first call-out that there is an underlying strong, sustained commercial momentum across our businesses. The second point we make is that we're seeing a pleasing, continued expansion of the fintech ecosystem. I mentioned earlier on, the growth in transaction volumes. We've seen also very healthy growth in transaction value across the platform. What is a standout in this reporting period has really been about the growth of the advanced services. We've spoken about basic services and advanced services. The advanced services are around remittance, payments, and BankTech. Those have grown very strongly.
In aggregate, advanced services grew at 58% year on year. So the case for the fintech business and its transformation is coming through in the results. On other strategic initiatives, we said we would do certain things, we have done them. The first is really around localization. We have localization requirements across a couple of markets driven by regulatory requirement. So in Uganda, the regulatory requirements are that there should be 20% local ownership. We've met that regulatory requirement, and the last further sell down of MTN Uganda yielded gross proceeds of about a billion rand equivalent, and we've ticked that regulatory compliance. In Ghana, we're looking to meet two very different regulatory requirements of local ownership.
For the core GSM business, there's a 25% local ownership, but because we have a substantial fintech business, the Bank of Ghana is looking for 30% local ownership. Again, we've made good progress there. In the period, further sell downs there, yielding about USD 700 million of gross proceeds. So we have about two percentage points of further localization to meet the fintech requirement as well there. So on localizations, good progress. We said we'd look to simplify the business. We have the framing of portfolio optimization. In the half, we concluded the exit of Afghanistan, orderly exit to an M1 associate vehicle, that we sold, you know, the business. And we announced post the period end, the exit of Guinea-Bissau. We have been in talks with Telecel to exit Guinea-Bissau and Guinea Conakry.
Progress now made on Bissau. The dialogue on Conakry with Telecel and the authorities in the market, you know, continue. We also made a statement that with the Mastercard transaction, what we want to do is try and bring in the commercial benefits, particularly on issuance and acceptance. We're beginning to roll out across seven markets. That partnership going into Q4 and early part of next year, we should see the results of that partnership really driving forward the advanced services that we spoke about. So on some of the key strategic initiatives, we're seeing good progress. This resilient underlying performance has been masked by some macro challenges, to be clear, and those macro challenges come into our reported results.
Now, Tsholo will take us through quite a bit of detail, but there are two main drivers that are dampening the very strong underlying performance in this period. The first is the significant and sharp devaluation of the naira. The naira was order of magnitude before May last year, around NGN 460. In June, there was liberalization of exchange rates, and the naira went to about NGN 770, closed the year at NGN 907. And we had quite a lot of volatility in the naira, particularly between January, February and March, and we've seen the naira average across the H1 at about NGN 1,500. Those currency shocks have impacted our reported earnings, as you'll see a little later on.
But actually, the underlying growth in Nigeria, when you look at the top line, how we are, you know, building up the customer base, et cetera, remains very strong. So Naira devaluation in particular is the first call-out. The second call-out is Sudan. In Sudan, as we are seeing all the geopolitical developments, Sudan, for us at MTN, is a very worrying situation about a humanitarian crisis that's unfolding on the continent as we sit here today. We have many Sudanese people displaced from their homes. The war is intensifying in a place like Khartoum, and many people have moved into different areas, and actually many people are in the diaspora. Our own management team are managing that business out of Cairo. We have some of our staff also out in Dubai.
So we had a period in March and in April, where the network was actually down. We've started to restore the network, and as we exited July, the revenue growth that we're seeing now exiting July, having restored the network, is where we were in January, before the intensive fighting that was in and around Khartoum. So Sudan had an impact in our results, both at the top-line level, voice and data. It shaved off some of the kind of organic growth we'd normally see, but also we brought in an impairment of about ZAR 3.8 billion, that Tsholo will talk to. So those were the big macro challenges that are masked of a strong underlying operating momentum that we've seen in the business.
The fifth point, financial flexibility and resilience. We've done a lot in the last couple of years to really put the balance sheet in good shape. Many of you remember where the Holdco balance sheet was 80% dollar-denominated debt. It's now about 22%. So we've been able to use the proceeds from debt streaming to change the mix of the debt that we hold at the center, giving the business more resilience, less mismatch of our debt profile versus the earnings that we had. And to Tsholo and the team, you know, very well, a job very well done in changing the debt mix. We closed off the period with Holdco leverage at one point six times, so just slightly above our target of one and a half times.
But I think the really important point is the debt mix has changed, and much more healthy, and we're able to do a decent amount of cash upstreaming in the half, ZAR 6.5 billion. And we cleared some of the outstanding dividends from Nigeria, H1 2023, that's been cleared as part of the ZAR 6.5, and Tsholo will give us more detail. Final point, encouraged by the underlying operational momentum and our ability to manage some of the headwinds that we're seeing in the near term, the board is comfortable to maintain the medium-term guidance. The board still anticipates a ZAR 3.30 dividend for FY 2024. We have an annual dividend guidance now, so we don't have an interim dividend. So that, as in, in per...
in more recent periods, you know, the final declaration would be in March of next year. And under current outlook and assumptions and our own solvency and assessment, you know, we feel comfortable with that ZAR 3.30 going forward. So just a couple of the commercial highlights that I spoke about at a high level. We see data traffic grew very strongly in the period. We're now carrying about 9,000 petabytes of data across our network. That's a data traffic increase of about just under 36%. Active data users are now at 150 million and monthly usage has moved up, you know, very strongly. Now it's about ten and a half.
Smartphone penetration, which is not on the slide, is now we're almost at the two-thirds of our customers are now on our network. Some of them using smartphone data regularly. Some we still need to encourage, you know, to start using data more regularly. Then on the fintech, similar directional progress of strong transaction volumes. The active merchants, as I mentioned, one and a half, prior period, two point three. You know, ultimately, you want ubiquity of merchants, so our customers can go anywhere, and they're able to transact. So that's a KPI I watch very closely because it is about, you know, the democratization of financial services and the ubiquity of what we deliver as MTN.
So pleasing progress, both on data and fintech, you know, are the underlying drivers of growth in the near to medium term. Tsholo will come through and give us more detail on the financials, but just a couple of key call-outs. On constant currency service revenue at 12.1, Tsholo will show you that, actually, when we strip out the effect of Sudan on constant currency, that 12.1 goes to 13.6. Now, a big compression in the service revenue has been actually that Nigeria used to be a much more significant part of the constant currency formula. So if you take out the translation impact of the Naira, i.e., kind of normalize it, actually, service revenue growth was about 18%.
So it speaks to the point that I said, underlying growth remains, you know, pretty strong, and as I mentioned, data and fintech service revenue. The currency effects and the ongoing conflict in Sudan, that's really had an impact on the earnings side. So we see a compression on headline earnings of about 50.5%. As we, again, will try and give you a normalized view, which looks to strip out the effect of the Naira devaluing so sharply and in such a large quantum. And gives you, again, a better underlying performance sense of how the business is actually doing organically. I spoke to the balance sheet elements. Again, fairly resilient, operating free cash flow under ZAR 10 billion, and adjusted ROE at 20%.
Coming into the operational review of the markets, and maybe starting with South Africa as usual, a couple of key call-outs. The performance in H1 is a tale of two quarters. The Q1 had some load shedding as we were completing our own network resilience investment, and the Q2 we're able to exit Q2 actually with network availability above 99%. So to Charles and the team, who've done a significant job much of last year and the Q1 of this year, we can say the investment in network resilience has been completed. We spent in total ZAR 4.6 billion towards ensuring that our circa 13,000 sites all have battery backup power with enough autonomy. We're seeking six- to eight-hour autonomy.
And in some of the sites, particularly the hub sites, we have further backup power in terms of gensets. Where we are able to, we're putting solar on rooftops to have a mix of backup power. And obviously, in the H2 and moving into Q3, load shedding has not been an issue for us with the Eskom grid, you know, kind of holding up steady. But the load shedding story and the issues around the network having availability issues because of power. I think Charles and team have done a sterling job in terms of you know dealing with that actually in about five quarters from a standing start. The other call-out in the market context has really been about inflation.
Inflation relatively has remained a little bit elevated, but I guess when you look at it relative to other markets, it's quite moderate. The key call-out market is the consumer's under pressure, particularly in the lower end. And I think you see it in some of the numbers, particularly around our prepaid business. We're seeing a bit of pressure there. Charles will talk about... If you have any questions around that, Charles is in the room and can answer that. But our key activities were really around investing in the network. So we put ZAR 4.6 billion of CapEx in the period into the network. 1.6 of that is the last stub of the network resilience.
So as we go into H2, all the CapEx is really about network capacity, and coverage, as we go along and picking up our 5G investments, which we'd pulled back a bit as we had, you know, directed that investment towards resilience. So, three billion purely on network and IT. We worked on price optimizations in the period. In February, we brought some tariff increases to postpaid. So that was February. We've looked at our prepaid portfolio, firstly looking to simplify it, but also, as we exited end of H1 in June and in July, we started to look at some bundles and looking at price optimization on the prepaid. And so the effects of that are not anywhere in the numbers for SA.
You'll see that, in terms of H2, and I would, I'd caution that you'll see more of it coming out of Q4 rather than Q3 as we're looking to optimize some of those prepaid bundles, and as I said, Charles is here to take questions around that. The service revenue development in South Africa has been encouraging. Q1 was 3%, Q2, 3.6%, so a nice progression on service revenue there, so that we end the period at 3.3%. All bearers doing well. I think the pressure we're seeing is more around prepaid, where we're seeing the consumer there a little bit under pressure.
In terms of Nigeria, you'll have seen a detailed presentation from Karl and the team on the Nigeria results, so I'll just pick up the key highlights. Three main points on market context. First is the devaluation that I mentioned, a very sharp devaluation, particularly in Q1. It stabilised somewhat, and we'll talk about that in the outlook, how we see that. Inflation has picked up, though the latest inflation prints are suggesting it may have peaked. It seems the efforts of the central bank to tighten rates, you know, is beginning, you know, to work. But elevated inflation has been a big part, and we see that in our cost base. You'll see the analysis from Sulu, and we had to navigate the NIN-SIM registration.
We took a zero tolerance on subscriber registration, and actually early terminated many of our subscribers, the deadlines have been extended somewhat. But those were the three main market context issues that Karl and the team had to contend with in the period. What have we focused on? We've focused on what we call the five-point plan internally, which are the set of initiatives that are going to improve the negative equity position that the business found itself as at the end of the year. And those five being, you know, advocating for a tariff increase, you know, through the industry body, renegotiating our tower contracts with IHS and ATC, looking to reduce the LCs that we still needed to pay down. We spoke about expense efficiencies, and we reduced CapEx.
So in terms of what we achieved in that five-point plan, I think there are a couple of ticks there. LCs brought down, it was about $400 million at the end of last year. That's all kind of $100 million and lower as of the half, so cleared the balance of that. So good progress there. We've managed to keep the CapEx envelope relatively tight. We've had the ability to have radio planning to manage some of the demand that we're seeing. As you can see, in Nigeria, data grew at 42.6%. You know, data growth has been very, very healthy in Nigeria. As I mentioned, the underlying trends there we're seeing are very, very pleasing. So we've managed a very tight CapEx envelope.
But most importantly, we spent a big chunk of the time, engaging with ATC and IHS to try and find win-win-win solutions in terms of these tower contracts, and to Carl and the team who spent, a big part of the last, seven months, you know, to and fro. These are very complex agreements to work, through, in kind of normal circumstances. And, you know, my thanks to the team for having, you know, made a substantial amount of progress. Just talking about, the tower agreements, we announced the successful conclusion with ATC and IHS with our trading statement on the seventh of August. Now, I know that the markets, we have many, on the buy side and the sell side, who want a lot more detail.
The first thing, I mean, these contracts are confidential, and there are many questions you'd like to ask us, and we won't answer them, not because we don't want to or we don't have the answer, but because they are confidential. However, what we're trying to do here is to give you a frame of what the impacts are without breaking any confidentialities. I'll just share some of the salient features, what was before and after, and then I'll follow up with a slide on pro forma financial effects, and as I said, these are confidential agreements. There are many questions you'd like to ask, and we won't be able to answer them to honor the confidentiality, but the salient points are as follows: With IHS, we've signed binding terms that are effective the first of April, 2024. We have escalations.
The escalations have, you know, reduced with caps in them, particularly the Naira inflation. There's a cap on the Naira inflation. We spoke a lot about this in the past, that we wanted to have tower arrangements that were not technology-based pricing, but more about space and power. So all the upgrades are now going to be about moving from technology-based pricing towards space and power, which is a lot more conventional. With space and power with ATC, we actually have space and power with IHS here in South Africa. And there are some additional discounts that post-2025 with IHS will be able to benefit from. Those discounts go from 2025 all the way up to 2032.
You know, the absolute amount of those discounts, you can see we haven't, you know, put them, but we didn't have those discounts before. The base rate at which we're converting previously dollar-denominated expenses is 1,050. That's the base rate at which that conversion happens on the first of April. And you can well imagine that the rates on 1 April would have been a number which was prevailing on 1 April. For those who pull out your calculators, that number you'll see was more like 1,500. So there's a bit of a benefit there that helps us in terms of the economic profile.
The bottom part of the chart, what we're trying to illustrate is the before and after in terms of a mix of US dollar-denominated, Naira-indexed, and Naira-diesel indexed. Naira diesel is at the pump, is in Naira, so it gets invoiced, and obviously it will have some correlation to crude prices, which are dollar-denominated, but at the pump in Nigeria, it's in Naira, and there's a base rate. So what you can see clearly there is that before, you know, 55-65 was dollar-indexed, the Naira indexation, 35-40, the 0-5 in terms of diesel indexation, that's more ATC. Previously with IHS, that number would have been zero, but when you blend IHS and ATC, the number looks more like 0-5% on an aggregate base.
But what does it look like now? So the dollar indexation, pure dollar indexation, is moved now to 35-40. You've got a slightly larger component of Naira and then the Naira diesel, in terms of the kind of blended average, and this is both IHS and ATC. We're moving to space and power. The power is indexed to the Naira diesel indexation, and then the space is again completely to Naira. So it's giving us a much healthier, from our perspective, mix of dollars versus Naira. And when we look at the financial effects, again, these are pro forma illustrative views. So at the EBITDA margin level, nine months, on a nine-month view, it has a benefit of 3-4 percentage points in Nigeria.
If you annualize it and keep it very simple, the math, nine months and annualize it to a full twelve months, there are obviously seasonality effects here, so we're just keeping the math simple here. So you'd be looking at somewhere between 4-5. The cash flow, we look at it, obviously, it's in Naira payments, nine months, NGN 75 billion-NGN 85 billion, annualize, NGN 100 billion. And the sensitivity, you well remember, the sensitivity was more like 1.3 for every 10 percentage points, because as you saw with the last slide, the clear dollar component has reduced, so you're seeing a slightly more muted, impact on sensitivity, Naira. And obviously, this is off a base of around 1,500-odd, Naira, to the USD. So the sensitivity is somewhere between half a percentage point, and 1%.
As I mentioned, and I'll say it for the third and final time, all of these agreements are confidential. You guys would like to ask us a lot of questions. What we will do with our Q3 release of Nigeria results is to go through it in extensive detail with the P&L effects. I'm talking about EBITDA, but you want to work this thing through all the way to PAT, and there's quite a bit that happens, you know, at finance cost, as an example. So we will do that with the release of the Nigeria results at the end of October to work through the P&L effects, also the balance sheet and cash flow effects. So this should give you some framing of you know why we see that renegotiation as having been successful.
The negotiation, the this tower renegotiation of the leases is not a silver bullet to solve the negative equity position. The big issue that we continue to engage on is really around tariff increase, and I'll talk about this a little bit later. Moving on from Nigeria, markets, we've seen very pleasing growth, in the SEA business, headed up by Yolanda. We've seen very good growth, on data and fintech. Uganda continues to be a very strong business all around. You know, you saw the top line grow, you know, very strong cash generation, stable margin, you know, from that business. Rwanda, dealing with, some regulatory challenges around mobile termination rates, and that's impacted us, you know, on the, connectivity side.
The fintech side within Rwanda growing very strongly and healthy. As we always say, you know, SEA is the business where we see the potential of fintech more generally. You know, 29% of service revenue is coming, total service revenue for SEA is actually coming out of the fintech. On the WECA side, again, also a pleasing growth for both data and fintech, you know, revenue. Ghana's results you'd have seen, but very pleasing growth on data revenue, 55%, fintech, 38%. We had price hikes on data that's helped sustain the healthy data revenue here, and the fintech business continues to grow very strongly. Cameroon, a solid set of results, some competitive challenges we've seen, and regulatory challenges, particularly around the ability for CVM in Côte d'Ivoire there.
But again, fintech showing a healthy contribution of 20%. MENA has been a story really around Sudan, as I mentioned earlier on, where the performance has been impacted by the ongoing conflict and actually our network being off air for a considerable amount of time. As I mentioned, we've exited now Afghanistan. We have two months of numbers of Afghanistan in the half, but that, you know, we've concluded the orderly exit. The joint venture in Irancell continues to grow, quite strongly growing 82%. You know, given U.S. sanctions, we still have money trapped there, about 3 billion ZAR of accumulated dividends at current exchange rates still there.
Snapp, the so-called Uber of the Middle East there, is still growing at a very healthy clip at 4.6 million daily rides. There's a big Snapp ecosystem that's built around ride hailing that is actually quite impressive within that market. On fintech, again, you know, talking about, you know, what's giving us confidence around the ecosystem expansion. As I mentioned, strong transaction volume growth. You see the BankTech loan value growing just under 53%. Payment and e-commerce, I mentioned, the merchants. Gross merchant merchandise value up 20.2%.
Remittances, opening up new remittance corridors, and that's up, you know, 20, just under 27%, in the period 573, you know, 77 inbound corridors, that we now have access to, and remittance is a big opportunity that we're obviously looking to leverage, you know, over time. Before I pass on to Tsholo, I'll come back, with outlook and priorities, just to, you know, kind of marking our own homework, in terms of the half against our medium-term guidance. The 12.1, we still think it's an amber, because of the underlying issues that I spoke to, and which Tsholo will explain when you look at it ex-Sudan, as well as the Nigeria translation. South Africa, as I mentioned, a tale of two halves, 3% in Q1, 3.6.
So we saw an acceleration in service revenue in the H2 of the year, and pretty much, you know, good progress around asset realization, and Tsholo will take us through the ROE. I'll pause here and ask Tsholo to come and take us through the financials, and I'll come back with outlook, and priorities.
... Thank you very much, Ralph. A very good afternoon to everyone that is joining us today. Ralph has shared with you the operating context under which we have been operating, the macro context under which we have operated. And I'm really pleased to share with you, you know, the resilience of our financial performance under these tough circumstances. But before I do that, I think it is important to just really highlight some of the significant items that impacted our results. And as you can see from a macro perspective, firstly, the sharp devaluation of the Naira resulted in, you know, a higher operating cost by ZAR 3.2 billion, as well as the FX losses of ZAR 13.8 billion coming through on our finance charges line.
In total, we had about ZAR 16.2 billion from a group perspective on these FX losses. We also had the effects of the foreign exchange translation impact on our reported currency results in this regard, based on a number of key subsidiaries, in particular, Nigeria. The translation effects reduced our bottom line by about ZAR 5.6 billion. Secondly, in terms of the key macro impacts, we recorded losses amounting to about ZAR 300 million from MTN Sudan. As Ralph has indicated, we're still seeing some challenges from an ongoing conflict perspective, and I'll just illustrate some of these as I go along.
I think just turning into the accounting effects on the right-hand side, if you recall, we had reported previously that MTN Nigeria's results included a restatement on the interim financials of 2023, arising from the revision of FX losses, unrealised FX losses relating to IFRS 16. So at high level, the impact on group result was on profit after tax, with restatement of ZAR 6.7 billion. And in terms of earnings per share, that was about 282, as you can see, 282 cents per share. And then in terms of the impairments that we recorded, MTN Sudan and aYo Group recorded ZAR 4.2 billion in total in terms of impairment.
As we've been indicating from a Sudan perspective, it was about 3.8 billion, roughly due to the continuing conflict that we are seeing. We also recorded just under 200 million, about 140 million in terms of impairment with regards to the remeasurement on the non-current assets held for sale. But we also saw a gain on disposal in terms of Afghanistan, as you recall, that we disposed of Afghanistan earlier in this year. I think these impacts you will see coming through on our expenses, our EBITDA, as well as our headline earnings per share.
Now, if we go into the details of our financial performance, starting with the salient points on the group income statement, you see that we delivered a service revenue growth in constant currency of 12.1%. And on a reported basis, service revenue declined by 20.8%, and largely due to the translation impacts that we mentioned earlier. And I will unpack this in a bit more detail in the following slide. And then in terms of EBITDA before once off, we saw a marginal decrease of 0.4% in constant currency as a result of the overall headwinds on the top line, but also upward cost pressures that we are seeing.
So consequently, we reported a decline of 4.4 percentage points on our EBITDA margin or to 336.5%. And on a reported EBITDA in absolute rand terms, increased, declined, sorry, by 41%. If you move on to depreciation, you will see that on a reported basis, decreased by 7.2%, really reflecting the translation effects. But on an underlying basis, depreciation was driven by CapEx additions as well as the spectrum acquisitions. With regards to net finance charges, which include FX losses, we saw an increase in constant currency of 106%, but an increase of 3.5% year-on-year on a reported basis to ZAR 23 billion. And I will unpack this also in a bit more detail later on.
When you look at the share of results of associate and joint ventures, you can see stellar performance with a growth of 88%, and this was really benefited from the strong contribution from Irancell, our JV, which saw a growth of 160% year-on-year in constant currency, and about 82% growth in constant currency. In terms of income tax expense, we saw a decline of 84%, and this was as a result of the major impact on our reported profits that declined, largely caused by the losses that we recorded in MTN Nigeria and Sudan in the main. And then the profile that you see on the interest of non-controlling shareholders was mainly due to these losses that I've also mentioned.
At bottom line, from an adjusted headline earnings per share, we saw a decline of 50%, and I will also unpack these movements later on in a different slide. In terms of our ROE, we reported a return of 20%, which was a reduction of 4.2 percentage points relative to last year, which was owing to the lower earnings that I've mentioned before. Now, I think it's important before I get into the service revenue breakdown of our business, just to unpack the detail and take you through on this slide some of the illustrative view of our service revenue if we adjust for these significant items that have impacted on our results.
In particular, these include the Sudan conflict, as well as the hyperinflationary impacts in South Sudan, as well as Ghana. But we also reflect here the impact of the devaluation of the currencies, most currencies against the ZAR, which is our reporting currency, and most significantly, the devaluation of the Naira. So you can see that the major call-out here is actually the translation impact of about ZAR 38 billion, of which Nigeria makes up about ZAR 36.5 billion, really reflecting the Naira depreciation against the ZAR, which was on average about 181% year on year.
So if you really aggregate these significant impacts, they had about 38.9 percentage points impact on our service revenue growth, which was really a decline of 20.8% that I mentioned on a reported basis. The slide demonstrates that had these headwinds not materialized, the service revenue would have been at around 18% year on year. If I can then move on to our group service revenue bearers, as you can see from a voice perspective, we continue to see we've seen a decline of 0.4%, largely impacted by voice substitution in South Africa. We also saw from an Ivory Coast perspective, being affected by the cable cut that took place in the Q1 of this year.
But also Ivory Coast is faced with intensifying competition as well as some regulatory headwinds. Some disruptive competitive pressure also were experienced in Benin and Rwanda in the main. Now, if you look at our data, you will see that it is the largest contributor to group service revenue, with a growth of 21%, really driven by strong data traffic growth in our markets. Again, also underpinned by the continued investment that we're making on our network. Fintech continued its strong growth and momentum with service revenue growth of 27%, which is in line with the medium-term target. You would recall that we have now revised the medium-term target on fintech service revenue to a high 20s% to low 30s% range.
Other, which includes SMS, Enterprise, and ICT, also showed good growth, mainly coming from Nigeria and SA, and I will share that also later. Overall, if we excluded MTN Sudan, the group delivery on service revenue would have been 13.6% in constant currency. Now, if I can just briefly touch on the performance of SA and Nigeria, our two large markets, and just starting with South Africa, it delivered service revenue growth of 3.3% year on year, really continuing to navigate a challenging macroeconomic environment. So where did this revenue come from? Largely came from data revenue, which rose by 2.4% year on year.
We saw a good growth as well from fintech of about 59%, driven mainly by airtime advances, but also the expansion of fintech offerings through you know targeted initiatives. As I indicated, South Africa also delivered very good growth on enterprise in terms of bulk SMS and ICT, largely from main deals, a growth of 26%, year on year. This, the growth in this service revenue bearers were, however, offset by the decline in voice of about 6.1%, although reflecting continued improvement in the overall trend during this period, and this outcome was also underpinned by the continued improvement in our network availability, as well as MTN SA's commercial initiatives.
If we can just look at the expenses from South Africa, you'll see that the growth year on year was 4.4%, with cost of sales growing by 7.4%, and this was largely driven by devices and commissions as they continue to drive channel expansion. Operating expenditure was very well managed during the period, with a growth of just 0.6% year on year. And this really enabled them to expand their margin with EBITDA growth of 4.3%, excluding the once-off gain on disposal of SA Tower.
In this performance, however, as we've indicated, there is the benefit of the sale of the insurance receivables amounting to just over ZAR 200 million, which is reported in other income. Excluding this benefit, the EBITDA would have increased by 2% with a margin of 35.7%. However, South Africa did continue to execute on our expense efficiency program, realizing a saving of about ZAR 500 million during the period. If I move on to Nigeria, and as we indicated, I won't dwell on Nigeria. Most of you will have seen the results coming from Nigeria on the thirtieth of July.
Nigeria delivered strong performance with service revenue growth of 32.4% in constant currency, in line with the prevailing inflation in Nigeria, as well as in line with their medium-term target. The result was supported by strong performance from most of their service revenue bearers. Very, very briefly, we saw voice growing by 12% in Nigeria, mainly on base growth, but also higher usage, driven by continued CVM initiatives. We saw data very, very strong, also growing by 55%, boosted by data bundle revamps as well as optimization. Again, a good growth from enterprise, which grew by 27%. If you look at the expenses, these were up 82% in constant currency, and within that mix, cost of sales grew by 34%, growing slightly above inflation and service revenue.
However, impacted by the Naira devaluation was a significant increase on the operating expenses, which went up 107% year on year, really impacted by the network expenses. And other drivers of higher OpEx was mainly the introduction of the VAT on tower leases, which was introduced in the last quarter last year, as well as elevated CPI adjustment on lease rentals and higher energy costs. So as a result of these higher operating expenses, you know, growing faster than the revenue, the MTN EBITDA margin declined by 17.4 percentage points to now 35.7.
So if we had to adjust for these combined effects, of Forex, with an impact of 15.3 percentage points, as well as the VAT on the tower leases, with an impact of about 2.7 percentage points, the EBITDA margin would have been at about 54%. In terms of capital expenditure, MTN Nigeria spent NGN 1.9 billion, and this was with a CapEx intensity of 9.4, and this is 9.4%, and this is excluding leases. As we communicated previously, MTN Nigeria did streamline their CapEx plan, in order to manage their cash flows, but more importantly as well, enabling them to accelerate the settlement of the dollar-denominated obligation.
So this exposure, they were able to reduce quite significantly since December, from about $417 million to now about around $100 million. So when you look at the Nigeria performance overall, they delivered solid underlying performance, despite a very challenging macro environment. If we can move on to FinTech. You saw FinTech grew by 27% in the period, as we continued to scale up our mobile financial services, withdrawals, and transfer services, which still make up the bulk of the contribution to group service revenue, grew by 20% and 22%, respectively. Very pleasing is the growth that we are seeing on advanced services, which rose by about 58%, really coming from payments and e-commerce, which grew by 37% in the period.
BankTech and remittance, although still nascent, growing by 73% as well as 39% respectively. So as you can see on the right-hand side, basic services to still contribute meaningfully to, you know, group FinTech service revenue, although a reduction, you know, from 62% to now 59% in terms of contribution, while advanced services contribution increased by five percentage points. And this aligns with our stated objective to move more towards a more advanced services in terms of the revenue, the revenue mix.
You'll also see that the strong top-line performance was supported by the, you know, continued, you know, efficiency initiatives to really drive improvement on the EBITDA margin within our target range, which we have communicated previously as our target range of mid-thirties to high-thirties %. If I move on to our group expenses now, just giving you a bit more detail, the total expenses grew by 20.3% to ZAR 59 billion, with group cost of sales up 12%, largely driven by the increases in commissions in our GSM, Fintech, as well as digital businesses.
In particular, we saw an increase in interconnect roaming cost, as well as, largely due to, increased traffic volumes, but also the impacts of the FX devaluations, mainly in Nigeria, had an impact on the cost of sales line. Looking at our operating expenses, you will notice that we saw an increase of 28% year on year, and the main driver of OpEx growth was really coming from our network expenses, which you can see on the right, grew by 58%, around 58%, contributing almost 18% of the total cost. Approximately 80% of the network expenses growth was driven by Nigeria due to the increased site rollout, a spike in inflation, as well as the FX devaluation impacts.
In other markets, the main cost pressures varied and mostly other coming from a higher energy cost as well. We also saw an increase on our staff cost in terms of about 11%, but this was well below our blended average inflation of about 14.1%. But the main drivers were really coming from an increase in headcount as we continue to scale up our platform businesses. Annual salary increases were really in line with inflation across all of our markets. If we can then move on to the next slide, just to indicate that it is very important for us to continue to try and cap, you know, the headwinds that we are seeing, and we continue with our expense efficiency program.
We delivered ZAR 2.4 billion in expense efficiencies in this period, with 35% of the savings, as you can see on the pie chart, recorded at head office, and this was followed by SA, then WECA, as well as the SEA regions . By area, these savings were largely coming from network and IT, contributing 34%, staff cost optimization contributing about 31%. You will also notice that on the right-hand side, we provide a view of how our total cost as a percentage of revenue has evolved. It has increased by almost four percentage points since the last period, but this really reflects the pressure that we are feeling through the tough macro environment, particularly the naira devaluation.
You'll notice that the network expenses as a percentage of revenue has increased from 13.3% to now almost 18%, while other operating expenses has slightly declined or remaining constant year on year. This really indicates just the impact on our network cost due to the macro impacts. We are continuing with our expense efficiency program, and we have communicated previously that we will deliver ZAR 7-8 billion over the three years from 2024 onwards. As I've indicated, we've now been able to deliver 2.4 billion ZAR, and those are the initiatives on the bottom right, that we continue to execute on amongst others.
If I can just move on to the finance cost breakdown. You will notice that our net interest was steady during the period, reflecting repayments on borrowing, mainly coming from Nigeria as well as Uganda. The average cost of borrowing has gone up to 12.8% from 10.8%, and this is mainly as a result of the higher interest rate environment across most of our markets. The decline in finance lease costs to 3.3 billion was largely due to the translation effects. So net finance costs on an underlying basis, including leases, decreased to 6.7 billion from 7.4 billion last year.
The big call-out on this slide is the FX losses, which amounted to ZAR 16.2 billion, as I indicated, of which ZAR 13.7 billion of that, on your right-hand side, came from Nigeria. There were some FX losses at head office, and these were largely due to FX impacts from cash upstreaming, mainly from Ghana, as well as Nigeria. If I can move on to our adjusted headline earnings per share. Firstly, a reminder that the 2023 figures had been restated as a result of the FX-related restatements in Nigeria that I mentioned earlier. So on this basis, you'll see that our attributable earnings per share moved into a loss of 409 cents, reflecting the lower earnings that I mentioned earlier.
This outcome was also impacted by the impairment of assets and losses on remeasurement of the disposal groups, totaling about ZAR 1.53. After adjusting for these items, our reported headline earnings was a loss of ZAR 2.56. The main impact on basic headline earnings came from hyperinflationary impacts, about ZAR 0.57 per share, as well as FX losses totaling ZAR 5.19 per share, of which ZAR 3.89 of that came from the naira devaluation during the period. So if we adjust for these non-operating items and non-operational items, you'll notice that adjusted headline earnings was down 50% to ZAR 3.37.
So I think it's important on the next slide, just to highlight these translation effects that mainly affected our headline earnings per share, adjusted headline earnings per share by 50%, as I mentioned. So circling back to the factors impacting our financial results, this analysis illustrates it at headline earnings per share level. You'd recall that I showed you a similar slide on service revenue analysis earlier. So similarly, this slide shows the outcome if we were to adjust for the effect of Sudan impairment, sorry, the effect of Sudan performance, the FX impacts on our cost in particular in Nigeria, as well as the translation effects of translating into our reporting currency, the South African rand.
So on this basis, adjusted headline earnings would have been 789 cents per share, versus the 373 cents that you are seeing. So this represents a growth of 6.9% versus the prior year. So again, the biggest impact, as you can see, is the FX devaluation in our key markets against the ZAR, with naira being the most significant from the devaluation. So 310 cents, of which the 283 cents per share came from Nigeria. If I can just move on to our capital expenditure. Briefly, we capitalized ZAR 13.4 billion, excluding leases with CapEx intensity of about 15%.
This is in the range that we target of between 15% and 18%. By market, you will see on the right-hand side that 34% came from South Africa as they completed their comprehensive network resilience plan. 14% came from Nigeria, as I did mention that there was some streamlining of capital expenditure in Nigeria as they continued to work through their dollar obligations. A combined 47% of our CapEx was deployed from other markets, SEA and WECA, in line with our capital allocation framework, as we continue to invest in faster growth areas.
By type, you will see that we spent about 74% in terms of investment in networks, and then IT was mainly about 26%, which is really also to support the, you know, scaling up of our platform businesses. Just to touch on our free cash flow analysis, and maybe to note that we have evolved our disclosure on this slide to better show the free cash flow analysis rather than, you know, the accounting cash flow recon that we used to provide. From the waterfall, you can see that our operating free cash flow declined by about 56% year on year to around ZAR 10 billion. This mainly reflects the pressure on our earnings. As you can see, our reported EBITDA at ZAR 29.9 billion, relative to what we had last year.
Working capital also had an impact with outflows of ZAR 7.4 billion, and in the main, this was largely due to trade receivables in various markets, at various parts of the business, due to some economic pressure, in some of the markets. There were also the prepayments to vendors to try and mitigate the FX volatility. We also saw some offsets in terms of working capital from trade receivables, mainly coming from Nigeria, as they continue to manage the availability of FX liquidity.
We also made payments for leases at ZAR 3.8 billion, and then in terms of capital expenditure payments, ZAR 14 billion, and this is before the payments for spectrum and licenses of ZAR 777 billion, which was a lot lower than the payments we made last year. So after, you know, we've made payments for interest, net interest, as well as taxes of ZAR 5.7, as well as ZAR 5.8 billion, there was a net flow in terms of free cash flow of about ZAR 2.4 billion. So I said a bit of short-term pressure in terms of our cash flow profile. We are fully focused on initiatives to navigate the current headwinds that we are seeing, and to deliver on our ambitions.
Ralph will be wrapping up and giving you just a view on some of the initiatives that we are looking at overall. If I move on to our leverage and liquidity profile before I hand back to Ralph. As you can see, despite the short-term pressure on free cash flow, our balance sheet remains strong, with group net debt to EBITDA ratio of 0.8 times, which is well within our covenant limits of 2.5 times. The slight regression in this ratio was due to softer EBITDA, as I've outlined earlier on. Our whole core leverage is now at 1.6 times, which is really broadly in line with our medium-term target.
Yes, our medium-term target is 1.5 times, and we are pleased that we have been able to maintain this, given the flux, you know, of our macro environment. In terms of the underlying drivers of our net core leverage, it was negatively impacted by, you know, reduced cash balances, given the dynamics I've explained earlier on. You'll also recall that we made a dividend distribution relating to 2023 in the first month in the Q2 , totaling about ZAR 6.2 billion. Our currency mix has assisted us in minimizing the impacts of FX on our net core leverage. As Ralph said, we're now at 22%, which is well below our targeted mix that we target of about 40%.
Our whole core liquidity headroom also remains very healthy at ZAR 30.4 billion, with ZAR 11.5 billion rand of cash balances and the balance of ZAR 18.9 billion coming from undrawn and committed facilities. We must say that the debt market remains supportive to the group. We have been successful in refinancing some of our maturities under the DMTN program, as well as our banking facilities, and we do remain committed in terms of early settlement of our dollar-denominated debt. We upstream gross cash of about ZAR 6.5 billion, as you can see, from various OpCos as well during the period. Over and above that, as indicated, we have received proceeds from Ghana and Uganda in terms of localization, about ZAR 1.7 billion.
So overall, we do believe that our balance sheet is in a very good shape, underpinned by the continued discipline in our capital allocation framework, and this really enabled us to navigate this current and macro environment and to support the execution of our strategy. Ladies and gentlemen, thank you very much. I now hand over to Ralph.
Thanks very much to taking the stakeholders through our financial performance and giving you both the underlying performance as well as the reported results. As I said, upfront, that I think our underlying performance and the momentum is very encouraging for us, but we have had to deal with the impact of the shock of the Naira devaluation, as well as the impacts of Sudan. So before we go to Q&A, maybe a final couple of closing points. The outlook. I think the operating environment we've been in in the last couple of quarters has been really driven by global macro conditions and how they've translated into our region and specifically into our markets.
We've seen quite a lot of currency movements, which you see in our results, inflation elevating, and actually growth being a lot more lackluster than people had anticipated. We're kind of looking forward and using sources that we believe are credible. So most of our data sources we use, I'm sure you all use your own models, we leverage IMF data sets. We often use Standard Bank Group Securities. They generally tend to be, on average, more accurate. They have people on the ground, and they actually, we tend to see their forecast more, you know, closer to reality. So we have a blended view on what's here.
I think you can well imagine that when we plan, we plan more conservatively than what you see here, just to make sure that if there are any shocks, we can actually absorb them. But I think the big main kind of global trends is, if you look at developing markets, is almost the peaking of inflation and the trend towards lower inflation and the rate-cutting cycle, when you look at discussions in Europe and the US. That trend, we believe, will come into our markets. I think when you listen to commentary around where the SARB is going to in South Africa, I mean, it gives you that sense that there is beginning to be a sense that inflation has somewhat peaked, and we should start to see rate cutting coming across.
GDP growth, you know, is seen as likely in the medium term to start accelerating, particularly on the back of inflation coming through, and you know, there are many views on currencies there that you know these are Standard Bank Group Securities view on closing exchange rates for the year. And you know, we plan a bit more cautiously than what you see here, but I think it's more about the trend than the absolute number, which is suggesting that actually we should start to see an easing of some of the headwinds, and so the strong underlying performance that we have should start coming back in the periods ahead into the reported results.
So within that context, of near term, continue some challenges, but beginning to see some moderation on inflation, interest rates, and so forth, what are our priorities for this year? The priorities we have are pretty much the same priorities we announced in March, and we continue to execute on those. Some of them, we can tick the box and say we've completed. We finished the network resilience. We remain on guard, if I think we see a reversal of the national grid. What we know is if the national grid comes back to levels pre-Q2, at stage six load shedding on network, given the investment in resilience, would be up by over 95%, given the mix of, backup power that we have.
So yes, we're happy with the situation with Eskom, but if that, for whatever reason, deteriorated, the network actually is resilient, and we've invested sufficiently, so as I mentioned earlier on, prepaid will be the focus, you know, for much of what, Charles's team will be doing, and we'll continue to work on those five action points in Nigeria. There's no silver bullet of one of them. We need the combination of all of these to come through. A movement of 100 NGN, either up or down, is exceptionally sensitive all the way to PAT.
I think many of you would ask us, you know, "How do you see...?" There are many moving parts, and I think it would be irresponsible for us to tell you, we think, you know, this is the single set of actions that will get us back to negative, sorry, to resolve the negative equity. We've got to work on all of them, including continue the discussions really around the tariff increase, you know, with the authorities. I think it's pressure not just only on us in Nigeria. You see it in Airtel's results, you see it in IHS's results, to sustain sufficient capital investment to support network and the significant growth, you know, we believe that ultimately we'll find ourselves with the authorities around that.
You know, in terms of the platform strategy, continuing to execute, we've spoken about issuance and acceptance, the seven initiatives. We'll see these coming through Q4 into early parts of next year as you know, we get traction in markets such as Rwanda, Uganda, Ghana, Nigeria, and as well as Côte d'Ivoire, that we're continuing to progress. The focus on expense efficiencies remains. As Tulu said, we've made good progress, but we've still got to get all the way up to the ZAR 8 billion, and we're not you know, going to pull back on that. TowerCo contracts, we've pretty much renegotiated all our tower contracts with IHS into 2030, into the next decade. So with IHS, we've done Rwanda, Zambia, Cameroon, Côte d'Ivoire, South Africa, and Nigeria.
So that set of contracts into the next decade have been completed, and we have, you know, our other tower co-partners. They're not as big in our lives as IHS, but with ATC, we've also closed out in Nigeria, and we have ATC also in our footprint here in South Africa. Cash streaming, we continue that focus. On the debt profile, as Tsholo said, our capital allocation framework has managing the, the dollar exposures as priority number two. Priority number one is investing in organic growth, which we'll continue to.
We've set out and communicated again that although we've capitalized 13 billion, we still anticipate for full year to be in the 28-33 billion corridor of CapEx investment to support the growth that we see in the network and ensure that our business is in a strong position as we navigate and exit some of the much more pronounced headwinds that we've experienced in the last period. We have a stub of 2024 bonds, about ZAR 1.8 billion equivalent, which we will settle as that stub matures in November, and the only bit of dollar debt that we'll have to deal with is the 2026. Again, good progress there.
And so these are the initiatives that we'll continue to focus on executing to ensure that the commercial and underlying momentum that we see in the business is maintained. We continue to share this graph, which gives us the confidence and view that the structural growth opportunity for data and fintech services remains. We started showing this graph post-COVID to show that this was not just a COVID dynamic.
In our markets, where the internet connectivity is still relatively nascent and financial services not as ubiquitous, we think that there is long-term growth that is evidenced by the kind of sequential growth that we continue to see in data traffic and fintech transaction volume, and we need to be able to, for our shareholders, to show that we can monetize this kind of growth that is quite unique to this continent as one looks at and compares with other jurisdictions. As I mentioned early on in my introductory remarks, the sixth important point was reconfirming the guidance. We are confirming the guidance that we've set out. Nothing has changed. We're still using the capital allocation framework, the same batting order that we've always had.
From time to time, we get questions from our shareholders: "At current share prices, don't you want to do a buyback now? It sends a message to investors that you believe, you know, the share is undervalued." We're saying, you know, we've taken those messages in, we've debated them with our advisors, we've debated them with our board, and we feel the right allocation of capital is to the growth opportunity, that we believe is structural and will continue to come through. So we're keeping our batting order of capital allocation pretty much the same, and I think you will see share buybacks, and specials right at the bottom of that list of top five.
Our focus is investing in networks and platforms, paying down the debt, and then the dividend, which we are saying for FY 2024, the 33 cents. The board anticipates we'll be able to meet that, and that's also within a CapEx envelope of ZAR 28-ZAR 33 billion for FY 2024. Ladies and gentlemen, that ends the presentation from Tsulu and myself. We do have Charles and Dineo in the room, so they can take the heavy questions on South Africa. Just give Tsulu and I an opportunity to you know to pass on some of the load. But happy I'd ask Tsulu to come onto stage. I think Thato also needs to come onto the stage. Charles and Dineo can stay seated in their lovely couches.
Thanks so much, Ralph and Tsulu, for the overview. I think important to go through quite a lot of important stuff in terms of what's affecting our performance. We only have 10 minutes left in terms of the schedule. We will indulge an extra five or 10 minutes past the five o'clock. Just an apology in advance for to those logging in on CNBC. That does have a hard stop, as we like to say in the corridors, at about five o'clock. So maybe let's just get into the questions, and we will interact with many of you over the next few days and weeks, so you will have another opportunity to interact with Ralph and Tsulu.
So maybe let's just start with, as we usually do, with questions in the room, and then we can get into to the online platforms.
Hi, everyone. I think all my questions are for Dineo and Charles on South Africa. I guess if you can, Charles, touch on the SA prepaid recovery. I'm just struggling to find where your customer value proposition is versus your peers. Your peers are seeing a nice recovery in prepaid, but you are not necessarily seeing as big of a recovery. What needs to happen on prepaid, and what will you entice us with over the next six months? Then I guess on your pricing gap versus Telkom and Cell C, if you can comment on that, how has that evolved over the last few years? Then on Ambition 2025 EBITDA margin guidance, please, can you remind me of that guidance?
I think the last time we had about 37%-39%, but that obviously was during load shedding, and you're like, what should the margin, how should the margins evolve, beyond that? Thanks.
Charles is sitting in the front here.
... Yeah, thank you so much. Thank you so much, Luisa. I think on the prepaid recovery, we put the price increases only in June and then going to July, and most of the price increases went into our internal channels. We expect that it will filter into the external channels, let's say July and then August. You can expect to see, you know, a relatively recovering prepaid performance, let's say towards September, then into Q4. So we are comfortable that in terms of where we are, we are actually mark to market in terms of pricing. I mean, I think in prepaid, to be honest, the propositions are practically the same. So I guess in the end, I think it will filter through in terms of our performance as well.
You also asked a question around telco and Cell C. I wanna check, is this on wholesale or is this on?
Consumer
... on consumer? No, look, I mean, we mark ourself largely against VC, if I could be honest. I think if you check our prices, we are largely comparable, compared to Vodacom. We did the price increases, more for more concept on some propositions. Some propositions, we went straight out and increased the ERM. So, you know, that's really our benchmark, I think, in terms of pricing, largely around the main competitor. And then in terms of the margin, I mean, we're still giving the push of 37-39. We have a very tough H2. I mean, it's a proper hockey stick coming through in H2.
That's why I was saying H2 will be slightly tougher, but we still remain, you know, focused on the guidance that we were given. Thanks.
Hi, everyone, it's Shannon from Nedbank. I'll split the questions around, so one for Tsholo, one for Charles, and one for Ralph. Tsholo, first for you. You didn't mention my favourite West African opco from upstreaming, so I just wanted to check if you did get anything out of Nigeria and at what rate, and obviously, contrary to that, if you didn't, why, considering FX liquidity has improved quite considerably? One for Charles. Your data subs grew 10%, your traffic was up 35%, but your revenue is only up 2.4%, and I compare that to Nigeria, where, you know, traffic was up 42%, users were up 10%, but they grew revenue 56%. So you're giving a lot more for a lot less, is what I'm thinking, but just some clarity there.
And then on a question for you, Ralph, on Zakhele Futhi. You know, just some rationale behind extending that deal. My take is that, you know, the dividends were quite weak over the last few years, so is there a sense of a sizable liability there in that Zakhele Futhi structure, which hasn't been cleared by the dividend? And, you know, by your forecast, the three-year extension, is that the thinking behind that? Thanks.
So?
Yeah. So I mean,
You want to order?
... we, in terms of, cash upstreaming from Nigeria, we have cleared the interim 2023 dividend. I think, as you know, there was no dividend declared for 2020, financial year ending 2023, the full year dividend, because of the negative equity. But the interim dividend was cleared, and we have been able to upstream that. It is in the $6.5 billion, as we've indicated.
Charles?
Yeah. And pressure, I mean, I think it's a good call. But let me lead by saying that come Q4, we should start to see a better year-on-year data performance from South Africa, because we did mention in Q1 that we have this load shedding on the extra time that we are doing that's affecting the data performance. So that's just to start on data performance. On the traffic profiling, you're right. You know, ADS is strong, revenue is 2.4%, and data is growing at 35% or so. So you're right, but let me unpack it a little bit. So if you segment the usage, you will see that the mobile traffic, let's talk about prepaid to be specific, is about only 9% increase in data traffic on prepaid.
So that is slightly, you know, aligned with the revenue performance overall. Where we have a pressure, is on the FWA traffic profile. We grew that proposition of home, quite aggressively, and I think the reason really was just to build the home, you know, base. We think we have done a fantastic job so far, and I think what we're going forward, to try to optimize, you know, and find a way to make sure that the usage, it, you know, does not exceed the plan. So think of it that way. You know, data should grow, let's say, into Q4, on the prepaid side as well. But then FWA, which is the biggest contributor of the traffic growth, you know, we'll try and manage that properly going forward.
But we really were deliberate because we wanted to actually get a bit of share in terms of fixed-line access. Thanks.
Yeah, on the question on Zakhele Futhi, I mean, we've been in discussions between the MTN Group board, and Zakhele board around the unwind, which is coming in, or scheduled for November of this year, for the eighth year. You know, on reflecting on where the scheme is, and also referencing the very sharp, unique devaluation of the naira at this particular point in time, the discussion was, we should actually think about extending it for another three years. Now, I mean, the detail of that extension for will be communicated, you know, as part of the EGM. But what the Zakhele Futhi board will have is the right to, you know, to unwind any time in that period. They will have that election ability to, you know, to unwind in that time.
So having taken cognizance of the fact that Zakhele Futhi has been a very strong underpin to our empowerment credentials, a very sharp devaluation of the naira, you've seen what's happened there, and then, not to guarantee a positive return, but it is a very sharp and sudden, and the applying of our minds of both boards was the two to three-year extension, you know, should be reasonable. It doesn't cost the shareholders too much. There is an NVF backlog that needs clearing there. You know, does that give it the ability to clear in the next two to three years? Those are some of the discussions that we've had between the two boards, and that'll be put forward to the EGM in October.
Thanks, Ralph. Maybe just check if there's another question in the house before I go to the online platform.
Thank you. Just a quick question for Charles, please. I just wanted to, now that the resilience spending in your CapEx line has passed, what does CapEx spend in South Africa look like for the rest of twenty twenty-four? Thank you.
Yeah, we remain on the current CapEx profile. I think we are just around, let's say about nine, nine odd billion. Yeah, ZAR 9.7 billion in terms of CapEx. The envelope doesn't change. You know, so I think the biggest thing will be how do you navigate the CapEx profile going to 2025, but for 2024, we remain on the current envelope.
Thank you.
Thank you. Let me just take a couple of questions from the online platforms. We'll start with Nigeria. Will Nigeria be subject to the minimum applicable tax laws while it is loss-making? What impact do the tower contract renegotiations have on MTN's negative equity position, i.e., could you provide a timeline for resolving the negative equity? And what do you perceive as sustainable margins in Nigeria?
Yeah, on, maybe just on the-
You, you take the tax one.
Yeah, on the first one, there is a minimum tax, even when you make losses. I think it's about 0.5% of total turnover. Yeah.
Yeah, look, in terms of the negative equity, I think to, you know, communicate that this is what we think, I think it will be irresponsible. There are many factors that move that number. As I said, a 100 naira movement is quite significant all the way to PAT, and that's just the naira. Then you've got to look at CPI. So there are a variety of forces, and we hope that even at the margin level, we've given you the guidance that says 10% movement either way at the margin level is 0.5%-1%. There are items below EBITDA, you know, finance cost line, that will move with the tenure of the lease liabilities having been increased to 2032, and so forth. And so those, you know, play a role.
The big, big thing that needs to come in is a decent tariff increase, and it's no silver bullet. You need a combination of all those factors. So we'll have to progressively work through all these five actions to ultimately get there. We don't see any single silver bullet in the near term. But if you think inflation will come down, if you think that the rates will stabilize, 'cause a lot of that FX is the IAS 21 application on FX movements. It's the movement between the FX. If it's stable, that FX delta is obviously small, and it doesn't have such a profound impact on your unrealized losses. So there are just too many factors there to be able to say to you, there's this very simple answer.
I mean, in terms of margins, the other issue is we've taken an approach which we look to in terms of applying IFRS 16 to try and mimic economic reality. There's an expedient approach of everything going below EBITDA. So your EBITDA margins look high because you're actually taking no FX above EBITDA, and all your movements are in below EBITDA. So again, when you're comparing the businesses, don't just look at the EBITDA. Everything is caught at the PAT level, and I think more increasingly you'll need to look at what are the PAT margins of the company rather than just the EBITDA margins, 'cause there's a lot of movement between EBITDA and at the PAT level.
Thanks. Maybe just the last couple of questions. I'm just trying to navigate those that have been answered. A combination here. This is the first one on, on SA. Please quantify the ICT once-off in South Africa, what kind of EBITDA contribution this had? And then on Nigeria, how much headroom do you have left in Nigeria to optimize pricing, in terms of the lack of price hikes so far?
Yeah, the SA ICT, I think we have a project with GBN. There's probably around total revenue that we took around, I think around eighty million or so. I won't talk like more into margin, but margin was slightly, you know, tight. These are normal ICT business, very difficult in terms of margin profile. So you can think top line, eighty million, and a very muted margin completely. Thanks.
Yeah, on the Nigeria side, I mean, the growth that you're seeing, fifty plus, you know, obviously there's usage, but we did have a bundle optimization, which we effected in October last year. And that gave us a blended level of increase, which we're still benefiting from in the current reporting period. I mean, I guess if we don't get the tariff increase progressed, I mean, we'll have to talk to the authorities and regulators really around kind of bundle optimization, which we effected in October. I mean, these discussions are ongoing.
And then just a question on Nigeria. Please, could you provide some color on where lenders and the NGX and other stakeholders sit with respect to upstreaming of cash from Nigeria when you still face a negative equity position? So I think it's asking you, can you upstream?
Yes.
and how much cash? That, I think, that was answered already.
Yeah.
So yeah-
I think we've answered the question. I mean, Nigeria can't declare dividend while they're in negative equity, and all the dividends have been upstreamed now. Yeah.
And then maybe just the final question, perhaps a follow-up on the earlier question, just on CapEx. Having spent about ZAR 4.6 billion on network resilience, is there a possibility that this investment would be subject to write-offs or amortization, given obviously ongoing, reduced load shedding, or is it too early to proclaim the end of load shedding?
It's too early to proclaim the end of load shedding. I will answer that.
Cool. I mean, I think we can wrap it up on that point, and we will interact with you, as I said, in the coming days and months. Just a reminder that we did tease a tour of the innovation lab. Those of you interested, if you could congregate towards the bottom right in the room. But otherwise, we are available to answer any further questions. Ralph, I think you've done your wrap-up, but if you've got any final words.
Ah, I've done my wrap-up. Yeah, I've done my wrap-up.
Brilliant. Thank you very much to everyone and everyone who's logged in online. Thank you.
Thanks. Much appreciated.