MTN rallies on earnings bonanza


MTN rallies on earnings bonanza

Published Date: 2020-07-27 | Source: Stephen Gunnion | Author: Stephen Gunnion

MTN rallies on earnings bonanza

First-half earnings were boosted by disposals while headline earnings gained from non-operational items.

MTN says its first-half earnings more than doubled, sending its shares more than 11% higher on Friday.

In a trading statement, the network operator said earnings per share (EPS) for the six months to end-June would be at least 140% higher than the 247c it reported last year while headline EPS would be at least twice at much as the 195c previously reported. EPS benefited from gains amounting to 341c per share after it disposed of its stakes in ATC Uganda and ATC Ghana while HEPS included non-operational items of about 50c per share.

MTN sold its stakes in the two cell phone tower joint ventures for a combined R8.9 billion earlier this year as part of its asset realisation programme aimed at reducing debt, simplifying its portfolio and improving returns.

The group gave no indication of its operational performance for the six months but in a first-quarter update in May it reported a 6.6 million rise in subscriber numbers to 257.3 million, with active data subscribers increasing by 2.9 million to 98.3 million. Group service revenue increased by 11.1% as double-digit improvements in Nigeria and Ghana more than compensated for a decline in SA.

Last week, Vodacom reported a 97.7% increase in data traffic for the three months to end-June after it cut the price of its data by an average 34% and as more people worked, entertained and studied from home due to Covid-19 and the lockdown.

In April, MTN also reduced the price of its monthly bundles of 1GB and less by 25-50%, with the 1GB bundle falling by 33% to R99.

The company said it would provide a further update once it had more certainty on the earnings ranges for the period. Its shares closed 10.7% up at R66.40.

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