MTN Group Limited (MTN) Earnings Call Transcript

Good afternoon, everyone, and welcome. It's my pleasure to welcome you to our interim results for the year and for the 6 months ended 30th June 2026. And A warm welcome to everybody here in the room at MTN Innovation Center, including all the members of our investment community and the media. I also would like to welcome members of Exco and any Board members who've come. We also welcome everyone joining us remotely as well as all the MTN colleagues across our markets. Before we begin, let me cover a few housekeeping points. First, our standard disclaimer and safe harbor statement is displayed on our screen now. There you have it. And it applies to today's presentation. For those physically in the room, just for you, in case of emergency, I understand that is 1 exit and the other is on my right. For connectivity, the WiFi details are now displayed on screen. I'll just pause a little to let you capture them. If you plan to share updates online, please use hashtag interims and tag our corporate accounts at MTN Group on X and at MTN on LinkedIn. A QR code for the whole results booklet is also displayed on screen for easy access. And finally, following this presentation, all guests in the room are invited to join us for cocktails and continue the conversation outside in the auditorium. Our agenda for today will begin with an operational and strategic review followed by the group's financial performance. We will then open the floor for questions. A reminder for all those on the webcast to please submit your questions through the platform, and we will read them from then try to answer them. That brings us to the start of today's presentation. It is now my pleasure to invite the MTN Group President and CEO, Ralph Mupita at this stage.

All right. Thanks very much, and extending my own. Welcome to all of you who have joined us here at head office campus at 14th Avenue, we have some shareholders and board of stakeholders who are here and also to extend welcome to all the stakeholders joining us on the various virtual platforms. And to the MTN across our 19 markets, you have delivered the results that we have the pleasure of showcasing to our stakeholders more broadly. And so over the next 45 minutes, we intend to take you through, as Roy has mentioned, the highlights, operational strategic review, financial overview and then the outlook and priorities that we have for the second half of the year. So Molefe, our Group CFO, is not with us today. She's had a bereavement in the family. She lost a brother pretty recently, and we're wishing all the best during this difficult time to her and her family. So I will be presenting the financial overview that should have ordinarily presented. And the numbers that I'll take you through would be those that she and her team produced. So going straight into the highlights. We've got 6 key messages that we like broader stakeholders to take away from the results. We trust that you've had the opportunity to read our SENS document since we released it early this morning. The first message is that we've had very strong commercial momentum that's translated into strong growth and solid profitability. The results are broad-based Nigeria, Ghana continue to deliver very strongly, but we've seen a good performance improvement, particularly for markets such as Cote d'Ivoire, Cameroon and Uganda have remained very resilient. And I'll take you through the picture of where the performance is coming from. The second is that the financial results have been pretty strong the top line. When you look at it on a constant currency basis, has grown 17.5% inside our medium-term guidance range. And we've seen EBITDA expanding more significantly than service revenue growth and the EBITDA margin that is reported at the end of the half is the strongest that we've seen, certainly since around 2012, adjusting for accounting changes, I17 and IFRS 16, broadly, this is the highest that we've achieved in over a decade. The third is really the story around fintech, reported service revenue below our guidance. And there's 3 nonoperating factors that have impacted the results that we've seen at just on 13.3%. And I'll take you through that detail of those 3 nonoperating impacts. And if you strip those out, the growth will be much closer to 19.3%. What is pleasing on the fintech side is that we're seeing the ecosystem continue to be very strong. So transaction values are up over 1/3, close on to $331 billion of transaction value going through our network over the period. And advanced services, which we see as a future proof services to our customers continue to accelerate over 30%, 32% to be exact. The fourth message is really about earnings, returns and the equity free cash flow growth. I'll take you through a bridge view on the drivers between basic EPS to adjusted headline earnings per share. The adjusted headline earnings per share, which were up 21.3% showed the underlying earnings momentum in the business. We saw also a very strong expansion on return on capital employed. We ended off the year last year, just on 27.1%, and we're closing the period for the first 6 months of the year at 31.5%. The equity free cash flow, which underpins our shareholder remuneration framework, grew a pleasing 32.7%. And when we look at the cash flow bridge will show you the quality of cash flow as well as cash conversion. The fifth message is we're seeing good progress on the IHS transaction, quite a complex transaction to get over the line. We've had to see disposal of the LatAm assets. There are tower companies in both Brazil and Colombia, which have been disposed of. And those cash proceeds have been rolled up to the group. And there's also been the sale of the fiber business to [ Tim ] in Brazil. And again, those cash proceeds are part of the funding structure for the transaction. We saw also the AGM successfully held on the fourth of August, and we're now going through the various regulatory approvals. One of the key regulatory approvals we called out with our results was the competition authorities in Nigeria, FCC PC where we've concluded our engagements with them, and we have secured conditional approval. One of the key terms of the conditional approval is that we are going to do a further sell-down of up to 30% to local Nigerian investors on a commercial arm's length basis subject to market conditions and any of the proceeds from that will be used to pay down the debt stack that's in IHS. I will give you a bit more detail on that. The sixth message is really around the share buyback program. We announced the share buyback as part of the shareholder remuneration framework. Composite of cash and share buybacks and the share buyback program over a 3-year period has a target of [ ZAR 6 billion ] equivalent where we repurchase the shares and cancel them on acquisitions. So that's commenced with the opening of the -- going into the open period. And we're also reaffirming the medium-term guidance, and we'll give you some color on how we're thinking about Nigeria, giving us the confidence, particularly when we saw the market reaction towards the Nigeria results, and I'll cover that a little bit later. So just a little bit on the macro conditions that we operated in a couple of key messages that were kind of fairly supportive in the period. We saw inflation coming down. So when you think about the half year last year, inflation was more around 14%. That's just slightly over 9% on a blended basis across our markets. Our 2 major currencies, both the naira and the rand fairly stable in the period. What was -- what does create an effect to our reported results is that the rest of African opcos were weaker against the South African rand in the period. We make a call out also that the growth prospects, as referenced by real GDP outlook -- they continue to be fairly robust. So this is giving us the confidence that the underlying demand that we see across the markets will translate into strong financial results. So when we look at the commercial momentum that we see in the business that I spoke about, what are some of the key indicators. We saw the subscriber base growth just shy of 318 million subscribers served across our market, let's say, growth of about just under 7%. Active data subscribers grew much faster as we saw more and more of our customers using data service on a more regular basis. And that you can see in the very strong data traffic that we would have seen across our markets, 14,338 petabytes of data traffic coming through our network. On the fintech side, we've just gone slightly under 71 million monthly active users. The fintech ecosystem continues to be strong. 13 billion transactions by volume across the period by value $330.5 billion equivalent, having grown by almost 1/3 in the period. So where is this growth coming from? So this is another way of looking at what are the drivers of growth, subscribers, active data users and our fintech monthly active users. So what you can see in this picture is that there's a broad-based contribution towards the growth subscribers in the period. Part of the growth we saw, Nigeria, you see there on the screen, [ 7.5 million ] but you also see that Ghana is growing. South Africa is flat. And then you see [indiscernible] and the Franco market is also contributing to growth. So this is a portfolio that is delivering the growth. Some of the markets are much more mature like South Africa, some more nascent and give us confidence that we'll still see strong runway for growth. So how does this translate into the financials, looking at the financial contribution from growth, earnings, balance sheet and returns. As I mentioned service revenue 17.5%, what's really driving that data -- when you look at data growth now, it's pretty much close to 50% of service revenue across our markets is data. It grew by 29.2%. And I'll show you later that voice is actually still fairly resilient in some of our markets, particularly if you look at markets ex SA, but the big driver of growth is increasing data usage across our markets. Earnings, very strong growth and contribution. These are KPIs I've mentioned. The balance sheet remains strong and resilient. We've got very low group leverage at 0.3x. The debt mix has improved considerably. We have an outstanding Eurobond of $500 million, which is due in October of this year, and we're well arranged to deal with that maturity as well as financing the IHS acquisition. So that debt mix is very pleasing, giving us shock absorbance capacity and the liquidity headroom has remained well above kind of what we see as the minimum that we want to see in the business. On the return side, the cash flow metrics all growing very strongly. And as I said, reporting a nice jump in report in returns on capital employed over the period. So let us have a look at the operational review looking at our key markets, starting with South Africa. I think South Africa is a tale of 2 halves. We've seen very good growth on postpaid, enterprise and wholesale. All these businesses growing well above inflation. The big drag on overall growth has been prepaid. Now within prepaid, 1 has to decompose it, you look at prepaid data, that has grown above inflation. And you can see that in the chart on the left-hand side, we're starting to see a reacceleration on prepaid data. The major drag is really around voice. We have, as we communicated with our results -- full year results of last year, that we are on a deliberate reset to improve the quality of prepaid growth. We want growth that is less dependent on airtime advance -- so we've pulled back quite sharply the extension of time advance into the prepaid base in South Africa. That used to be about 42%. It's now in the low 30s -- we've stabilized the amount of that into the market. We've seen improving repayment rates within the month. October last year would have been saying, [indiscernible] and with that deliberateness of pulling back the airtime advanced, it does have an outside effect on voices more strongly correlated in the prepaid base to airtime advances. And we think that this is the right set of actions to improve the quality of that base. There are other actions that we've taken around product simplification and those are ongoing. And on the channel mix side starting to do more direct integration with the banks, they are also kind of working capital positive effects of that, and that is ongoing. So the reset is continuing -- and as we move into the second half of the year, particularly focused on a recovery in prepaid voice, we should start to see getting us back into growth for the full prepaid segment. Moving on to Nigeria. Just a couple of key messages, Karl and the team reported results a few weeks ago. So very strong growth on the net addition side. Data usage is pretty strong all around. The market conditions in Nigeria were characterized by pretty stable naira improved liquidity. The liquidity at the exchange rates that is prevailing does not present us with much difficulties. We've seen inflation moderating during the period. But of course, the big call out in the period was that there were higher global ore prices, which translates into higher diesel price. Our network in Nigeria is like 95% on diesel generators, 5% on the grid. So diesel prices have flowed through into our cost structures, just over 30% of OpEx within Nigeria is energy prices, and that's substantially diesel. And the way our contracts work, the cost in the quarter is the prior quarters average diesel prices. So what we experienced in Q2 of this year will come into Q3 and then Q3 will come into Q2, and we'll talk a little bit about that. Notwithstanding that, we really pushed hard on capitalization. The CapEx intensity in Nigeria was over 20% as we pursued growth in our mobile network, and pushing hard on the significant home opportunity that we spoke about at the Capital Markets Day that we see in Nigeria, pushing both a combination of fixed wireless access as well as fiber where we see the use case and the investment case for fiber to be pretty strong. The other big callout that I mentioned was we had a directive from the FCC PC, which is the competition authorities there to suspend airtime advance in April. Our posture, as always, is we take tolerance to kind of regulatory sanctions and positions. So we brought our airtime base down to 1/4 of what the run rate would have been in quarter 1. So that has had massive impacts on the revenue would have generated between April, May and June. Subsequent to the period ending, we received communications from the FCC PC and we back on a recovery path with the airtime advance and we're moving from a one-vendor environment to 4 vendors that are now in the system. So in Q3 and 4, we should start to see that build up back in terms of the white-listed base where we can extend airtime advance in Nigeria. So that had a big drag on the service revenue in Q2. You see a 13% print, including the airtime advanced impact -- but if you were to strip that out, that's kind of high 20s service revenue growth in Nigeria. And there was also the base effect of last year's tariff increase, which came fully into Q2 which creates a bit of a base effect, and I'll come back to that in a subsequent slide. But I think what we are pleased with is that demand in Nigeria continues to be robust. And whether you look at net additions and when you look at data usage growth, the demand is structurally strong and remains so in Nigeria. As I mentioned, 1 of the issues we saw was just the importance of communicating the 2 effects we saw in Nigeria. As I mentioned, the first is the base effect. So on the left-hand side of the chart, the graph is showing year-on-year increase of service revenue growth in yellow. And then the gray bars are showing you compounded 2-year average, which is smoothing out some of those base effect. So what you can see between Q1 2025 and Q2 2025, a very elevated increase in the service revenue growth. That is when the tariff increase, the 50% tariff increase came into full effect. So it drove very strong growth in Q2, very strong growth into Q3. But when you start to look at a much more normalized 2-year CAGR, you see that actually the growth is kind of more normalized. The right-hand side of the chart is telling another story around demand. So we've indexed Q1 2025 to 100 up to Q2 2026. So we are now generating over 65% service revenue, absolute service revenue versus the first quarter of last year, when the tariff increases came through. Those 2 effects, including the extra time suspension are the major drags which reverse out as we move into the second half of the year. And we are confident that the medium-term guidance framework we gave around Nigeria will be maintained on service revenue. On the EBITDA margin will still be in range, but because of the higher energy prices, we see ourselves at the lower end of the range, the lower end of the range is around 53% EBITDA margin. So that is Nigeria. Moving to Ghana. Ghana had a stellar performance in the year, sustaining service revenue growth of 32%. Inflation has come down quite a lot. Inflation is just under 4%. And Ghana is out of hyperinflation. Many of you remember that last year, we're talking about Ghana having gone into hyperinflation. It's out of hyperinflation, and that has some accounting effects that I'll explain a little bit later. We saw a slight weakness in the cedi versus the closing of last year and averaging out to 11.33 cedis to the U.S. dollar. The macro environment we see is relatively stable, and we pushed quite hard in rolling out new sites and very strong CapEx additions in the period, rolling out new sites. And again, it's a market that we believe has got strong home connectivity potential. We saw a very strong growth in EBITDA and then EBITDA margin, our highest EBITDA margin we're generating across the business is in Ghana at 61.8% and very strong PAT growth. And you can see that data contribution to service revenue is pretty close to almost 60% now in Ghana, where we're seeing very strong growth and demand. You saw Nigeria average customers using about 14.8 gigs, Ghana is like 19%. So -- and the demand continues to grow in that particular market. On fintech, as I mentioned, the reported print and growth, 13.3% and the nonoperational items, which I'll touch on to were really around the Uganda election shutdown of the mobile money system. And of course, Ghana is a big part of our fintech platform, second only to Ghana. There was a change in the float, we're earning 4% on float, that was brought down to 1, and that had an impact. And the final bridge point, which I'll come to a little bit later, is this extra time in Nigeria effect. But as I mentioned earlier on, the ecosystem continues to be strong. We see high transaction volumes, transaction values being very strong and advanced services, which are the future continuing to grow very strongly. Pleasing growth that we saw, particularly on bank tech. So that's up 78%. The majority of our bank tech has been through partner banks. As we mentioned before, we'll start to incrementally do our own balance sheet lending as we look to acquire the appropriate licenses across several markets, and we're seeing good growth on payments and e-commerce as well as remittances across the piece. Active agents have also grown. And active merchants, which gives us a sense of the capillarity of our network and usage across grew by 18%, 2.3 million active merchants using -- that accept mobile money across our markets. In terms of our medium-term guidance, I think we're pretty pleased with most of the indicators. The key areas of work still to be done are South Africa. As I said, South Africa, if you diagnose the problem, the key issue is prepaid voice. The balance is actually growing pretty healthily. But that's a function also of deliberate steps that Ferdi and team have taken to improve the base quality and reduce the amount of airtime lending. And then fintech at 13.3%. We would call out that for the full year, we don't believe that we will be in the guidance range, particularly driven by the extra time impact that we've seen in Nigeria. Leverage is very healthy. And as I mentioned, returns on capital employed remains at the top end of our own 3-year outlook. Moving on to the financial review. Let me just start off by addressing the material noncash adjustments to earnings, which gives you a bridge view from basic earnings to adjusted headline earnings. There are 3 big items to call out here. The first is the impairment on remeasurement of our investment in 49% shareholding in Iran so. Given the macroeconomic conditions, both the hyperinflation as well as the currency devaluation and on remeasuring that asset, we took just on a [ ZAR 3.9 billion ] in payment. That's [ ZAR 2.13 ] per share of our basic EPS. The business -- the investment now is about 3% of adjusted headline earnings and about 7% of group net assets. We have a carrying value there of about [ ZAR 10.5 billion ]. And obviously, at the full year, there is an opportunity to look at remeasuring that investment. The second are hyperinflationary fix with a couple of markets in hyperinflation Sudan, South Sudan and Iran is 1 of those. The hyperinflation effect you see in Ghana is Ghana coming out of hyperinflation and the translation effects of that to the P&L. That's another [ 0.22 ] that you see there. Then on foreign exchange, there was some slight benefit from Nigeria, but the big callouts were really around South Sudan, where the currency of reference is the parallel market rate. The official market rate is not accessible. There's very limited foreign currency there. So for all practical purposes, the parallel rate and there was a massive devaluation of South Sudan pound, and that's the EUR 0.65 that you see there. the upstreaming is Ghana upstreaming from Ghana to Dubai and the exchange rate depreciation there is the large contributor of that. So that's a repatriation set of issues. So when you reconcile all of that, you get back to the EUR 7.93 per share, which was up 21%, showing the underlying growth Obviously, these items are all noncash. And I think as you'll see later that the cash conversion from earnings to cash remains very strong across the group. I won't spend too much time on the P&L, many lines to analyze here. And some of them we've touched on, particularly service revenue and EBITDA. As you move down the P&L, I think some of the highlight points I've covered losses, you'll see increase by [ 31.9 ], largely explained, as I said, by South Sudan and the repatriation of dividends out of Ghana to Dubai to the group the Irancell impairment. So from a swing of profit from JVs and associates to a loss of ZAR 3.3 billion equivalent. We also saw through the improved profit before tax, but actually the tax charge is much higher. And we've seen the withholding taxes -- so as you repatriate, we had a pretty strong cash upstreaming half year ZAR 13.9 billion. So that attracts quite a bit of withholding taxes in the period. And the strong earnings of Nigeria and Ghana with the minorities, you'll see that there's a strong share of minorities, about ZAR 4 billion that went through to noncontrolling interest. Just walking through some of the elements of the P&L. I think a couple of key messages on the service revenue contribution. As I mentioned, data is now 50% of service revenue and the biggest contributor growing at 29%. I think a few callouts. Obviously, all the bearers are in growth. Even voice at 2.4, the growth is much higher when you strip out South Africa, where growth in the half was a negative 0.4%, but a very healthy growth that you see, digital services increasing their own contribution, wholesale, being also a big part of, in particular, the South African business. If we look at the finTech coming back to fintech, again, kind of decomposing the revenue bearers. The basic services, the basic services grew relatively sluggish from our own performance, and there were a couple of challenges there, and I mentioned Uganda because of the election shutdown. Advanced services I mentioned, growing at 32% and airtime advance actually contracted in the period -- that's largely a function of suspension of airtime advance in Nigeria. When you look at the margin, the margin has come down slightly, 42.4%. And but that's largely driven by the lower contribution of airtime advance. If you normalize for that, actually, the margin is about 38.8%, which is still relatively healthy. And then you can see the mix effect, revenue contribution on the right-hand side of the chart, that's slowly increasing the proportion of advanced services, pretty much 1/3 of total services from a revenue contribution side. As I mentioned, how does the 13.3% translates to 19.3%. The 3 drivers, the election shut down for the whole system. We're out for over a week. Now a week doesn't seem like a long time, but it's difficult to fill that weak up over time. So that's 0.6 percentage points. The Ghana flow trade change 4% to 1 as the inflation and rates came down. That compressed some of the earnings we have ordinarily enjoyed. And then the big impact is really our suspension of the extra time or time advance in Nigeria. And you can see that bridge view to try and create a much more normalization effect. So obviously, these are nonoperational items, but the team is working hard to try and reverse those -- the big 1 being Nigeria. As I mentioned, we now have a 4 vendor platform that we're working hard to bring back to full capacity. Group expenses. A couple of points I would raise here. Firstly, they grew at 13.3% on a blended basis. That's lower than the 17.5%, the service revenue growth. So operating leverage coming through, and you can see the total cost to revenue contribution coming down from just under 56% and that is cost to revenue to just slightly above 52%. When you look at where the big changes are, the big ones are really cost of sales, some of that would have been on the extra time side, to be clear. But I think more importantly is the network, leases and utilities. We have revised quite a lot of the tower contracts, and over the last couple of years, they've given us some benefit and resilience when we look at the experience breakdown. So this is driving the operating leverage that's improving the EBITDA margins. We do make a call out because it's important to reference energy prices in a global environment where energy prices are fairly -- relatively higher than would have all thought. We thought it's important to reiterate that energy costs for the group of 15% to 20%. And in Nigeria, they're more between 30% to 35% in terms of OpEx contribution. And because diesel is the biggest component of total energy I mean I think you can see that diesel would -- the movement of diesel prices has an impact on margins. We have given the sensitivity before that says if you start off the year with diesel prices like 1,100 naira per liter and you moved to 2,000 the sensitivity that would shave off 1.8 to 2 percentage points of EBITDA margin. If you annualize the full second half of the year, so expenses are nicely managed and creating operating leverage. We've also benefited in the half with our continued expense efficiency program which generated about [ 1.2 billion ] of expense savings in the period. Moving on to EBITDA. Obviously, as I mentioned, we've got a bit of jaws helping us here between service revenue and expenses. We see EBITDA growing just under 7 percentage points above service revenue. And we are seeing this margin expansion. H1 was a bit of a low for the group. It had a bit of the Nigeria shocks that we experienced with the sudden currency devaluation and we burned through our distributable reserves. We've built these back up in Nigeria, and you can see a nice uptick on margin. If you think about MTN as a business with several clusters, let's call them 5 clusters. We saw Nigeria expanding margins, there's expansion of margins in Ghana. There's expansion of margins in Francophone. [indiscernible], there's a slight contraction. That's largely to do with Uganda and then in South Africa, if you strip out the share-based payments, we would have had a slight margin improvement. The share-based payments created the contraction. So there's broad-based contribution towards this margin improvement that you've seen. On CapEx, we capitalized about 16.6% in terms of CapEx intensity. That's just shy of ZAR 20 billion. Some of the markets where we're seeing faster growth opportunities like Nigeria and elsewhere. The CapEx intensity is much closer to 20%. So this is the average of the portfolio. And we anticipate that in this full year, we will remain in that 15% to 18% that we try and manage the allocation of CapEx into building the network, the IT investments that are needed to grow our business. So you can see on the right-hand side of the chart that the majority of the CapEx in the half went into the network connectivity business as we pursue growth in the mobile network as well as in our home connectivity. Just on cash conversion, how are we translating earnings to equity free cash flow, you can see there the bridge view and some key callouts. Obviously, cash CapEx is a large item in the half. That was just under ZAR 23 billion. Operating free cash flow before spectrum and licenses. We didn't have much licenses and spectrum in the period. That grew a healthy 23%. Then the free cash flow itself grew when you look at net interest paid and taxes. But just on to 66%. We've had over ZAR 4 billion equivalent of -- that was paid to noncontrolling interest, minorities, driving the equity free cash flow to just shy of a third 33% growth, and that is the best framework for our shareholder remuneration framework. On leverage and liquidity, again, very strong balance sheet, group leverage, as I mentioned, 0.3%. As I -- as you see, cash upstreaming last year was about ZAR 8.2 million, this year at ZAR 13.9 million, a very strong cash upstreaming from markets such as Ghana and Nigeria in particular. But we have cash upstreaming from more broadly across the portfolio. and we tend to have a much stronger second half of cash upstreaming than the first half. So this is pleasing to see the amount of cash upstreaming that's come through in the half, just under ZAR 14 billion. And then when you look at our debt stack at the holdco level, quite pleasing, a good maturity profile. This year, as I mentioned, we have the final of the euro bonds that we've had probably for the last decade. That comes up for maturity in October. And as I said, we have the resources to deal with that and other investments that may be ongoing. So very limited U.S. dollar. For sure, when you bring IHS, that kind of ramps back up. And on a pro forma basis, we see that moving from 0.3x to about 0.8% in the way that we've thought about the funding for the transaction. Just finally, just looking at the results and standing back, I think the key call out is kind of high-quality growth and returns delivered in the first half. From a CapEx intensity, you see 16.6% EBITDA margin, as I mentioned, is very healthy, strong returns -- and free cash flow conversion when we look at free cash flow over reported profit after tax, a very strong at ZAR 92.5 million. At the end of the day, you want to convert as much of your earnings to free cash flow. So in the period, it was actually very pleasing. Just moving on to the outlook and priorities, which is the final section before we take any questions. Obviously, the macro outlook remains uncertain driven by global geopolitical developments that are out there. All of you read the same material that we do in trying to understand the forecast. These are not our numbers. These are numbers that we get from other agencies. But just showing that growth across our markets, sub-Saharan markets, is expected to remain fairly resilient. Inflation is expected to remain quite muted. There might be a slight tick up in Ghana according to the data sets that we see. But the main issues to watch out for into the second half is the direction of travel for inflation across the markets. Where do the currencies move and of course, energy prices because it affects the power input as well as the expense -- direct expenses into overall MTN Nigeria in particular. So what are we monitoring amongst many things. We monitor many things, but call out these 4 global oil prices and how that translates into diesel costs. regulatory developments, where the spectrum acquisition opportunities. Ghana, I think, is well known that the 5G is coming up in Ghana imminently, there are a few others that are there. South Africa, there is the end-user regulations that is topical and in discussions with the authorities. Then obviously, the geopolitical developments have second order effects that we need to keep an eye on. Technology is always an area that needs focus. You get the technology shifts wrong. The business will lose its footing. We're looking at how these air frontier models are developing both in the West and in the East. How these open rate models are developing and their capabilities at what cost points, what token consumption token economics go with those. It's -- these are things that Charles and the team are focused on as we deploy ourselves internally. Leo satellite partnerships and how we embrace them within our overall connectivity space. We do believe that there's a place for partnerships, and we do believe that 1 has to take a market-by-market approach on how we deal with that. Chipset pricing is really impacting handset affordability. Obviously, the chip manufacturers can either direct demand to handsets or the big build-out of data centers that's happening globally. So we've seen that create a bit of a for the moment, a barrier towards smartphone affordability, and we have to work around that by finding financing solutions. So these are some of the things that we're monitoring as we go into the second half. And so what are our key focus areas? They're pretty much the same as we spoke about with our full year results of FY 2025, deliver the prepaid recovery. It's a deliberate reset, and we're seeing pleasing momentum in that. It will take a bit of time. We want to sustain the commercial momentum we're seeing across the business. As I mentioned, that we're seeing broad-based growth 1 market, which has been under pressure and used to be quite a significant contributor, particularly to group upstreaming used to be Benin. And then in -- within the francophone market, -- the regulatory asymmetry has been removed, which is very helpful for us, particularly around price for because we have a big business there. We have a strong market leadership Uchin team. So [indiscernible] call are working around that. So we want to see that momentum coming through. We want to see momentum in Cote d'Ivoire. We want to see the strong growth in Cameroon come back. and the recovery, particularly around Uganda, so that we have resilience within the portfolio and being able to drive the growth. And we have our fintech commercial and strategic priorities. We are launching a new platform. We've spoken in the past that we need to build a new future fintech platform. So we're starting that in Nigeria, as we speak right now. We did announce our partnership with Ant financial. [ Carin ] and the team have done a lot of work around that platform in Nigeria. So I think we'll be able to launch in the next couple of weeks what we call MVP 1, and so that we address all the latency and issues around the platform that has kind of hobbled up the progress that would have wanted. So very pleased that, that is now in traction and looking at a variety of licenses across some of the markets. And obviously, the rebuild of airtime advance into Q3 and Q4. The fourth is continue to remain capital discipline, cost discipline and maintaining this healthy financial profile for the group and then obviously completing the IHS transaction. So on the IHS transaction, a few points before I wrap up and close. As we've said before, the pro forma -- from a pro forma perspective, transaction is accretive revenue and to earnings. And I think we continue to believe that will carry on and translate. And obviously, we're going to have to fund the acquisition by raising some debt to fund a portion of the transaction. You will remember that they are -- we will fund it both through the cash that the business has accumulated from operating cash resources as well as the sale proceeds from Lat Am. Both of those would be used as buying out the 75% shareholders. And then there will be about $1.1 billion that we need to raise to complete, and that's all been arranged, and we will be ready to act as soon as we met all the conditions precedent. On the FCC PC, I think I need to be a little bit precise on this 1 just so that you get the framing correct. We've agreed with the competition authorities to have 30% localization to Nigeria investors on an arm's length market basis subject to market conditions. And obviously, we'd like to do it as quickly as possible, but they're all those providers any proceeds from that sell-down for that part of the business will be used to reduce the IHS, which obviously will reduce the total debt stack that we'll have on day -- so we'll see how that progresses once the transaction. And we do anticipate that the transaction should close. We had positive feedback from COMESA on Friday with the FCC PC and the 2 -- the 3 major outstanding ones would still be the NCC Nigeria, which we are engaging them with the competition authorities here in South Africa with the size of the transaction from a comp, it's -- it will have to go through the tribunal as customary given the size of the transaction. And we also have [indiscernible]. So these are areas of [indiscernible] and his team, our M&A regulatory legal teams are working to try and get us. So some of the steps we've completed and the other ones seem on track if you have closed off second half of the year, as the time period. So ladies and gentlemen, thanks very much for listening to me the last, I think, almost 45 minutes. And yes, I've had to do the financial review. I haven't done it in several years. So fleet came out clearly. The medium-term guidance, we are reaffirming it. As we said, for this year, fintech will be out of guidance. But over a 3- to 5-year period, which is what our guidance is, we are maintaining that guidance at this period. Shareholder remuneration framework is in place, 40% to 60% of equity free cash flow in this period that grew 32%. And we have initiated a buyback and appointed the broker. So that should commence -- has commenced effective today. So we have -- we have confirmed previously to you that at the end of each quarter, we'll report on how that buyback program has gone. So at the end of Q3, we'll give you some feedback. The investment case, which we spend a lot of time taking you through with our Capital Markets Day, remains the core of how we think about the opportunity for digital and financial inclusion across the markets. We remain excited about it and committed to delivering the value that we're promising shareholders. With that, Roy, I'll pause and I think open up for any questions. Thank you.

Thanks for that, Ralph. A big applause. He did 2 people's jobs. Before I go to questions in the room, some of the questions that have come online, I think we'll cover a lot of the things that you're interested in, particularly the ones around South Africa. So I want to bunch them together and then I'll put them out there. So the first question is around the extra time rationalization and its impact on data and voice in South Africa. So what the question is, how much further do you need to go? What is an ideal level of extra time penetration? When do you think all of this bottoms out and you start seeing an improvement from a top line perspective?

Yes. Ferdi, in the room, so I'm not going to pretend to be Ferdi and do his job as well. Ferdi -- get a mic to Ferdi, who can talk about the initiatives around SA.

Good afternoon, everybody. So we've done a lot of work on extra time. We feel at this particular point in time that we've reached a level where we are comfortable to start pushing extra time into the market again. We've started doing this. Of course, the concern is we must do it in a very responsible manner. We can't just go out there and push extra time. We could end up in a similar situation where we feel we were earlier where we were perhaps penetrating too deep and also penetrating in the wrong part of the market. But it's obviously substantial and it has a direct impact on revenue, whether it's voice or data, it just has an immediate direct impact on it.

Well, we still have you there, Ferdi. One other question that keeps coming up is, is Cell C up to date to their payments? And when will negotiations around an updated pricing framework for the roaming agreement be finalized?

So the relationship with Cell C, I think is healthy and ongoing. Of course, contracts of that nature are huge and complex and they also allow for parties to get together when it's required. So we are busy talking to Cell C at the moment. I've said before, and I think it's important to reiterate again I wouldn't like to provide more detail. We do have an NDA, and it is very complex. So I wouldn't like to give more information on Cell C at this stage.

Thanks, Ferdi. Any questions in the room? Louise?

Ferdi, maybe if we can stick with you on South Africa CapEx. It seems you're spending at the current run rate, half of that of your #1 peer. Can you give us color to the you think that will accelerate into the second half?

CapEx always accelerates in the second part of the year. We -- right now busy with the substantial upgrade on our radio systems. We started, I think, about 6 weeks or 7 weeks ago. So you will see an increase in CapEx. The rollout of [ Sakatbeen ] quite promising. We've seen good improvement in quality, and we've also seen data growth on the back of the CapEx rollout. But I think it's fairly normal that it comes in towards the latter part of the year. As CapEx is a bit slower than Nigeria. Nigeria always goes a lot earlier. So you see it earlier, SA was a bit slow. And I think the other issue on the upgrade of the rand, we had to go through quite an extensive procurement process as well. So that takes a little bit longer than what we anticipated.

And my second question is on the uncertain tax exposures contained in your contingent liabilities that has doubled year-on-year. Is this related to new tax assessments? Or is it penalties and is interest?

New tax assessments. I mean across the portfolio, from time to time, you do have disputes with the tax authorities, whether the tax authorities look back. And if we believe it's relatively certain or put it through or put into provisions. So on a contingent basis, it would be communicating that there are -- there are new matters generally that we are dealing with.

Just on Ghana, business seems like it's growing quite nicely. Can we maybe just get a sense of what the growth profile and sort of runway is for that business? And if it is indexed to home connectivity, how should we be thinking about potential cannibalization of other revenue streams or and the capital intensity?

Yes. I mean, I think, as you say, Ghana has had a good runway. And I think capital markets, the big question was how long can this last? And obviously, we're saying to the team, keep pushing. I think the big growth vector for Ghana going forward is we'll move from mobility to home. And when I say in the future, we're talking about the next quarter or 2. But more structurally, the next 3 years is we see a significant home opportunity in Ghana that we can -- that's addressable from our point of view. And it will come in 2 forms. Obviously, fiber and fixed wireless access. We've been pushing fiber quite a bit now. because we haven't had 5G spectrum. So the potential for getting decent quantums of low-band spectrum as well as the mid-band spectrum is very attractive to us, just given the significance of the home opportunity and balancing between fixed wireless access and fiber. So that's a growth vector that we are encouraged by. Actually, Ghana, if you look at the barriers, it's actually got a decent contribution from the other barriers such as digital as an example. But the big 1 would be that. The balance sheet in Ghana is can accommodate a level of debt to finance such spectrum acquisition without putting to parallel the kind of earnings and cash upstreaming that we would ordinarily enjoy. So yes, I mean, the margins quite -- is quite strong at 61.8. But the big thing for us would be seeing the home opportunity turn into cedis and returns.

Ralph, sticking with Ghana question. Interesting one here, the Ghana EBITDA margin must be high enough that the regulator takes notice. It's pretty rare that you get asked about how you get margins down, but what flexibility do you have? And how do you think about the sales of the Ghana business in the context of the Ghanian economy. Peso was having margins of 60 -- none was asking that question I'm sure. Look, I mean, the reality is that we've invested very strongly into the market and through the cycle. So the market position we have and the returns we're generating is a function of sustained investment. So we're always saying to authorities when they travel to markets is that part of the growth in size and the scale is actually a derivative of the investment. If you don't put investment, you won't get that growth. But if you put the investment, the growth will come because of the nascent demand, this is not all top line driven. So you saw voice in Ghana is actually pretty muted. It's really driven by data. And remember, we have S&P regulations still intact with like 6 or 7 measures around our market behavior because of our scale. We are S&P [indiscernible]. So we really have restrictions around what we can and can't do in Ghana. The operating leverage has enabled these margins to get to where they are. Do we think that they will sustain at this level forever. I'm not sure we can sit -- stand here and say that. I mean, for us, in Ghana, the important thing is continuing to meet the demand that we see. And yes, and make sure that we make a social contribution beyond just the taxes that we pay. And I think Steve and team are very focused on that.

[ Mary Winkler ] would like to know, the group plans this [ $6 billion ] buyback over 3 years. Subject to the share price being attractively valued, is it possible for you to do it much faster like in a year?

Yes, we can't give up that kind of information just yet. I mean our program has been ZAR 6 billion to be executed up to a maximum of 2028. And when we allocate the resources to a broker that they go on and we give them a framework and amend it, let's see where they get to and see where we are end of each quarter, and we'll be able to update it. I don't think I can say much more than that. As Paseo, I think you'll have a sense of our own internal view of what is fair value. And [indiscernible], we can't say more than that.