MTN Group today announced that the loss of power utility Eskom (SA) has cost the local company R695 million in EBITDA (earnings before interest, tax, depreciation and amortisation) in the 2022 financial year.
The company said in South Africa, the extent of persistent power outages (load shedding) worsened in the second quarter, exacerbating the negative impact on network availability and pressures on the business.
“We continued to implement our comprehensive network resilience plan to mitigate these impacts,” MTN said in a statement.
“Our investment in this regard, which included dealing with vandalism and additional security on sites, put additional pressure on operating costs.
“We estimate that the overall effect of loadshedding on topline and costs resulted in a negative impact of R695 million (or 3.4%) on MTN South Africa’s (MTN SA) EBITDA.”
The group added that MTN SA began rolling out a comprehensive grid resilience plan in the second half of 2022 and aims to complete this process by the end of May 2023.
“We are encouraged by the performance of the business and the focus on network resilience. Amid unprecedented loadshedding and the intensified need for back-up power in the second half of 2022, MTN South Africa invested significantly to secure network resilience,” said MTN Group CEO Ralph Mupita.
“With the state of disaster regulations gazetted, South Africa now has a unique opportunity to accelerate efforts to secure the resilience of critical national infrastructure such as telecommunications.
“Government and business must jointly seize this moment and act decisively to deal with the quadruple crises of energy, logistics; crime and corruption; and youth unemployment. Inaction risks South Africa being a failed nation state.”
Power supply in South Africa was an increasing risk by 2022, with 208 days of load shedding, 146 of them in the second half of the year. This affected not only grid availability but also some business functions, impacting our customers’ ability to recharge and upgrade their packages. MTN SA made solid progress in the rollout of its network resilience plan, which will be completed by the end of May 2023, which will enable significant improvement in grid availability in H2.
“Furthermore, considering the increased frequency and intensity of stage 6 loadshedding, as well as the potential threat of stage 8, MTN SA is working with its partners on further optimising sites to ensure consistent performance of the resilience upgrades. This optimisation process is expected to be concluded by December 2023.”
