Notes to the consolidated interim financial statements

The directors of MTN Group Limited (the Company), its subsidiaries, joint ventures, associates and structured entities (together, the Group) take full responsibility for the preparation of the consolidated interim financial statements. The consolidated interim financial statements have been reviewed by Ernst & Young Inc., who have expressed an unmodified conclusion thereon. The auditor has performed its review in accordance with International Standard on Review Engagements (ISRE) 2410.

The Company is a leading pan-African mobile operator that provides a diverse range of voice, data, digital, fintech, wholesale and enterprise services through its subsidiary companies, joint ventures, associates and related investments.

The consolidated interim financial statements for the six months ended 30 June 2025 are prepared in accordance with the requirements of the Johannesburg Stock Exchange (JSE) Limited Listings Requirements for interim financial statements and the requirements of the Companies Act, No 71 of 2008, as amended (the Companies Act), applicable to interim financial statements. The interim financial statements were prepared in accordance with the framework concepts and the measurement and recognition requirements of the International Financial Reporting Accounting Standards (IFRS Accounting Standards), as issued by the International Accounting Standards Board (IASB), the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council (FRSC), and prepared in accordance with and containing the information required by IAS 34 Interim Financial Reporting.

The consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2024, which were also prepared in accordance with IFRS Accounting Standards.

The accounting policies applied in the preparation of the consolidated interim financial statements are in terms of IFRS Accounting Standards and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements.

One amendment to accounting pronouncements was effective from 1 January 2025, which relates to the Lack of Exchangeability, amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates. The Group can access more than an insignificant amount of the foreign currency in each of the jurisdictions the Group operates in, therefore the amendment to IAS 21 The Effects of Changes in Foreign Exchange Rates, has an immaterial impact in the current reporting period.

5.1 Deferred tax

Source of estimation uncertainty

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences (as applicable) to the extent that it is probable that future taxable profits will be available against which the deferred tax assets can be used. The Group is required to make significant estimates in assessing whether future taxable profits will be available.

Future taxable profits are determined based on business plans for individual subsidiaries in the Group and the probable reversal of taxable temporary differences in future. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Such reductions are reversed when the probability of future taxable profits improves. MTN Group recognised deferred tax assets at the end of the current period amounted to R8 867 million (30 June 2024: R11 296 million and 31 December 2024: R10 457 million).

MTN Mauritius recognised a deferred tax asset of R3 332 million (30 June 2024: R3 886 million and 31 December 2024: R3 332 million) mainly resulting from an assessed loss. The Group derecognised Rnil million (30 June 2024: R500 million and 31 December 2024: R1 055 million) of the previously recognised deferred tax asset in relation to MTN Mauritius.

The Group considered the following factors in assessing whether it is probable that MTN Mauritius will have future taxable profits available against which the deferred tax asset can be used:

• It is unlikely that the circumstances that resulted in MTN Mauritius incurring assessed losses will recur indefinitely.
• Interest expense and foreign exchange exposures will reduce as MTN Mauritius repays its US$ denominated intercompany debt. The repayments are currently scheduled to occur in 2026.
• Technical service fees from subsidiaries are expected to increase as more services are provided centrally.

Based on current business plans and stress scenarios, the Group expects to utilise the deferred tax asset in the next 10 to 11 years.

The financial statements (including comparative amounts) of the Group entities whose functional currencies are the currencies of hyperinflationary economies are adjusted in terms of the measuring unit current at the end of the reporting period. The impacts of hyperinflation disclosed for Irancell have been proportioned for the Group’s shareholding.

The impact of hyperinflation on the segment analysis is as follows:

The Group has identified reportable segments that are used by the Group Executive Committee (the Chief Operating Decision Maker (CODM)) to make key operating decisions, allocate resources and assess performance. The reportable segments are largely grouped according to their geographic locations and reporting lines to the CODM.

The Group’s underlying operations are clustered as follows:

• South Africa.
• Nigeria.
• South and East Africa (SEA).
• West and Central Africa (WECA).
• Middle East and North Africa (MENA).

South Africa and Nigeria comprise the segment information for the South African and Nigerian cellular network services providers, respectively.

The SEA, WECA, and MENA clusters comprise segment information for operations in those regions which are also network services providers in the Group.

Operating results are reported and reviewed regularly by the CODM and include items directly attributable to a segment, as well as those that are attributed on a reasonable basis, whether from external transactions or from transactions with other Group segments.

A key performance measure of reporting profit for the Group is CODM EBITDA. CODM EBITDA is defined as earnings before finance income, finance costs, foreign exchange gains or losses, tax, depreciation, and amortisation, and is also presented before recognising the following items:

• Impairment of goodwill.
• Net monetary gain resulting from the application of hyperinflation.
• Share of results of associates and joint ventures after tax (note 9).
• Hyperinflation (note 6).
• Loss/gain on sale of towers (note 17).
• Impairment loss on Sudan’s non-current assets (note 18).
• Impairment loss on remeasurement of non-current assets held for sale.
• Gain on disposal of MTN Afghanistan.
• Loss on disposal of MTN Guinea-Conakry.
• Gain on disposal of MTN Guinea-Bissau.

These exclusions remained unchanged from the prior year. Impairment losses on property, plant and equipment and intangible assets are generally included in the CODM EBITDA as they are operational in nature. As the impairment of MTN Sudan’s property, plant and equipment and intangible assets arose from the conflict in Sudan, it was not considered reflective of MTN Sudan’s operational performance for the period.

Irancell Telecommunications Company Services (PJSC) (Irancell) proportionate results are included in the segment analysis as reviewed by the CODM and excluded from reported results for revenue, CODM EBITDA and capital expenditure (capex) due to equity accounting for joint ventures. The results of Irancell in the segments analysis exclude the impact of hyperinflation accounting.

Irancell loan and receivable

On 20 September 2019, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Central Bank of Iran (CBI) as being subject to sanctions. Sanctions imposed on the CBI create a secondary sanctions risk if the CBI allocates foreign currency to an MTN entity for the purpose of repatriating the receivable and/or loan.

Considering the continued uncertainty of when the sanctions will be lifted, the Group has classified R2 554 million (30 June 2024: R3 080 million, 31 December 2024: R2 806 million) of the outstanding receivables as non-current as the settlement is neither planned nor likely to occur in the foreseeable future. The balance has been presented as part of investment in associates and joint ventures.

Number of ordinary shares

Treasury shares

Treasury shares of 760 979 (June 2024: 878 172, December 2024: 815 553) are held by the Group and 2 476 448 (June 2024: 76 835 378, December 2024: 76 835 378) are held by MTN Zakhele Futhi (RF) Limited (MTN Zakhele Futhi).

Zakhele Futhi unwind

The Group structured a B-BBEE transaction through a separate legal entity in 2016, MTN Zakhele Futhi. MTN Zakhele Futhi acquired 76 835 378 Company shares as part of this transaction. MTN Zakhele Futhi was required to repay preference shares funding and notional vendor financing (NVF) that was used to acquire the shares before the Company shares held by MTN Zakhele Futhi become unencumbered, while the Company shares are the only security offered by MTN Zakhele Futhi for the debt funding obtained.

Until the Company shares held by MTN Zakhele Futhi became unencumbered, the ordinary shareholders of MTN Zakhele Futhi were exposed to the gains of the Company shares, while their exposure to downside risk or risk of loss was limited to their equity contributions (i.e., the purchase price paid by them for the MTN Zakhele Futhi shares). Consequently, the Company did not recognise its shares issued to MTN Zakhele Futhi and did not recognise the NVF as outstanding but treated it as an option for accounting purposes. The Group recognised a share-based payment expense of R1 008 million for the option granted in the year ended 31 December 2016.

The scheme was scheduled to mature on 22 November 2024. An extension for a further three years to November 2027 was approved on 14 October 2024, there was no financial impact for the Group. In the period ended 30 June 2025, the MTN Zakhele Futhi Board elected, with the consent of the Group and the relevant funders, to fully unwind the scheme and settle its funding obligations.

MTN Zakhele Futhi implemented an accelerated bookbuild offering and, as a result, 23 768 040 of the Company shares held by MTN Zakhele Futhi were sold. MTN Group’s issued number of shares in terms of IFRS Accounting Standards increased by 23 768 040 shares and a R3 042 million increase in share premium was recognised in the statement of changes in equity as a result of this offering.

On 19 June 2025, an amount of R460 million was paid by MTN Zakhele Futhi to settle the preference shares.

As part of the unwind, the Group repurchased 50 590 890 of its shares from MTN Zakhele Futhi. The repurchase of these shares fully settled the notional vendor financing balance. The repurchased shares were subsequently cancelled by the Company and consequently categorised as authorised unissued shares. The number of MTN Group shares issued for accounting purposes remains unchanged after the repurchase, as the MTN Group shares held by MTN Zakhele Futhi were not deemed to be issued in terms of IFRS Accounting Standards.

On 4 July 2025, the MTN Zakhele Futhi Board approved the declaration of a cash distribution by way of a return of contributed tax capital of R20 per MTN Zakhele Futhi share. The distribution declared to external MTN Zakhele Futhi shareholders will be recognised as a dividend to non-controlling interests.

As at 30 June 2025, 2 476 448 MTN Group shares remain in MTN Zakhele Futhi. The remaining shares will be sold on the open market in due course. The proceeds will be used to cover taxes and costs including unwind costs, and the balance will be distributed to holders of MTN Zakhele Futhi ordinary shares as an additional cash distribution.

11.1 Financial assets and financial liabilities at amortised cost

The carrying value of current receivables and liabilities measured at amortised cost approximates their fair value.

Listed long-term borrowings

The Group had listed long-term fixed interest rate senior unsecured notes in issue, which were issued in prior years and settled in 2024. In June 2024, a carrying amount of R1 908 million and had a fair value of R1 762 million. The notes are listed on the Irish bond market and the fair values of these instruments are determined by reference to quoted prices in this market. The market for these bonds is not considered to be liquid, and consequently, the fair value measurement is categorised within level 2 of the fair value hierarchy.

At 30 June 2025, US$500 million redeemable in 2026 (the 2026 notes) had a carrying amount of R8 985 million (30 June 2024: R9 107 million, 31 December 2024: R9 580 million) and a fair value of R8 964 million (30 June 2024: R9 117 million, 31 December 2024: R9 559 million). The notes are listed on the Irish bond market and the fair value of these instruments is determined by reference to quoted prices in this market. The market for these bonds is not considered to be liquid, and consequently, the fair value measurement is categorised within level 2 of the fair value hierarchy.

11.2 Financial instruments measured at fair value

IHS Group listed equity investment

Included in investments in the condensed consolidated statement of financial position is an equity investment in IHS Group at fair value of R8 395 million (30 June 2024: R4 971 million, 31 December 2024: R4 702 million). The fair value of the investment is determined by reference to published price quotations on the New York Stock Exchange. The share price of IHS Group was US$5.56 (30 June 2024: US$3.20, 31 December 2024: US$2.92) on the last trading day of the period. The fair value of this investment is categorised within level 1 of the fair value hierarchy.

A fair value increase of R4 164 million (30 June 2024: R2 212 million decrease, 31 December 2024: R2 650 million decrease) has been recognised. On 14 August 2025, the IHS Group share price was US$6.96 equating to an increase in the fair value of R2 064 million subsequent to 30 June 2025.

Financial liabilities measured at fair value through profit and loss

The Group has financial liabilities relating to the deferred payment terms that arose with the acquisition of the MoMo platform licence. At 30 June 2025 the financial liability had a carrying value of R2 208 million (31 December 2024: R2 578 million). A portion of the deferred payments includes cash flows that vary according to the performance of each operating company in terms of revenue generation as well as the strength of the Local currency compared to the fixed minimum commitment (contractually stated forward exchange rates and revenues). The economic characteristics and risks of these cash flows were assessed to be closely related to the fixed minimum commitments. Accordingly, the embedded derivative was not separated from the host contract. At initial recognition, the MoMo platform licence was measured as the present value of the future minimum commitments using each operating company’s incremental borrowing rate.

At each reporting period, the financial liability is remeasured to its fair value utilising the forward-looking revenues and forward exchange rates for each operating company that will affect the value of the future minimum commitments.

11.3 Financial instruments measured at fair value reconciliations

Reconciliation of level 3 financial instruments

The table below sets out the reconciliation of financial instruments that are measured at fair value based on inputs that are not based on observable market data (level 3):

11.4 Capital management

Management regularly monitors and reviews covenant ratios. In terms of the banking facilities, the Group is required to comply with financial covenants. These financial covenants differ based on the contractual terms of each facility and incorporate both IFRS Accounting Standards and non-IFRS Accounting Standards various financial measures. The Group has complied with all other externally imposed loan covenants during the current period.

During the period under review the following entities raised and repaid significant debt instruments:

Uncertain tax exposures

The Group operates in numerous tax jurisdictions and the Group’s interpretation and application of the various tax rules applied in direct and indirect tax filings may result in disputes between the Group and the relevant tax authority. The outcome of such disputes may not be favourable to the Group. At 30 June 2025, there were a number of tax disputes ongoing in various of the Group’s operating entities.

Legal and regulatory matters

The Group is involved in various legal and regulatory matters, the outcome of which may not be favourable to the Group and none of which are considered individually material.

The Group has applied its judgement and has recognised liabilities based on whether additional amounts will be payable and has included contingent liabilities where economic outflows are considered possible but not probable.

The Group’s functional and presentation currency is rand. The strengthening of the closing rate of the rand against the functional currencies of the Group’s largest operations contributed to the increase in consolidated assets and liabilities and the resulting foreign currency translation reserve increase of R16 780 million (30 June 2024: R9 907 million decrease, December 2024: R5 553 million increase) for the period.

Net investment hedges

The Group hedges a designated portion of its United States dollar net assets in MTN (Dubai) Limited (MTN Dubai) for forex exposure arising between the US$ and ZAR as part of the Group’s risk management objectives. The Group designated external borrowings denominated in US$ held by MTN (Mauritius) Investments Limited with a value of R8.9 billion (30 June 2024: R10.9 billion, 31 December 2024: R9.6 billion). For the period of the hedge relationship, foreign exchange movements on these hedging instruments are recognised in OCI as part of the FCTR, offsetting the exchange differences recognised in OCI, arising on translation of the designated United States dollar net assets of MTN Dubai to ZAR. The cumulative foreign exchange movement recognised in OCI will only be reclassified to profit or loss upon loss of control of MTN Dubai.

To assess hedge effectiveness the Group performs hedge effectiveness testing by comparing the changes in the carrying amount of the debt that is attributable to a change in the spot rate with changes in the net assets designated in MTN Dubai. There was no hedge ineffectiveness recognised in profit or loss during the current or prior year.

MTN SA Tower Sale

MTN SA entered into an agreement with IHS Group to sell its tower infrastructure (comprising approximately 5 700 tower sites) and power assets; cede related agreements, including land lease agreements (on which the towers are constructed) to IHS Group; and lease back space on the towers which it would sell. The related conditions precedent were fulfilled and the transactions became effective on 30 May 2022.

The remaining land leases transferred to IHS Group will be derecognised as they are legally ceded to IHS Group and the related gain or loss on derecognition will be accounted for as part of the overall gain or loss on disposal group.

The remaining land leases are presented as held for sale:

Conflict started in Sudan’s capital, Khartoum, on 15 April 2023 between the Sudanese Armed Forces and the Rapid Support Forces, which led to damage to state-owned infrastructure in the city. As the conflict continued, limited grid power and fuel availability and the instability of fibre transmission links resulted in the degradation of network availability of MTN’s Sudanese operation in 2023.

On 2 February 2024, the Rapid Support Forces ordered a nationwide telecommunication shutdown. Due to MTN Sudan’s network topology and increased conflict in the country, MTN Sudan was only able to recover the network at the end of May 2024 and currently has some sites on-air in safe regions.

During 2025, MTN Sudan achieved access to some network sites in Khartoum for the first time since the network shut down in February 2024. As a result, MTN Sudan significantly increased the number of on-air sites. MTN Sudan is committed to increasing their on-air sites to connect the Sudanese people despite the challenging circumstances.

Performance of MTN Sudan continued to improve, since achieving some network sites on-air, however, the ongoing Sudan conflict has led to a prolonged hyperinflationary environment. Due to applying hyperinflation accounting, the Group has recognised a R1 559 million increase in MTN Sudan’s net non-monetary assets. As at 30 June 2025, MTN Group has recognised an impairment of R2 233 million (30 June 2024: R3 803 million; 31 December 2024: R11 722 million) relating to MTN Sudan’s non-current assets.

The following key assumptions were used:

• Growth rate: A terminal growth rate of 15.3% (31 December 2024: 8.4%).
• Discount rate: Two discount rates of 73.15% and 43.62% (31 December 2024: 74.29% and 35.58%), reflecting periods in conflict and out of conflict, respectively.

The total impairment of R2 233 million comprised of the following:

MTN Ghana localisation

The Group disposed of shares in MTN Ghana to Ghanaian citizens as part of the Group’s localisation strategy. This took the Group’s shareholding from 73.99% to 72.91%.

The proceeds generated from the localisation, net of taxes and transaction costs, amounted to US$11 million (R201 million1). This resulted in a net loss of R301 million that was recognised in equity as a transaction with non-controlling interest.

On 10 July 2025, subsequent to the interim reporting date, MTN Ghana paid a Ghanian cedi equivalent of US$74 million (approximately, R1 314 million) for the new spectrum assignment in the 1800 MHz and 2600 MHz, Technology Neutrality in the 900 MHz, 1800 MHz and 2100 MHz and extension of licence validity dates to 2038.