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MTN rides on African growth
MTN rides on African growth
Published Date: 2019-08-12 | Source: Stephen Gunnion | Author: Stephen Gunnion
Revenue from the network operator's businesses in Nigeria, Ghana and Uganda compensated for muted growth in its home market.
MTN says the first six months of its financial year included a number of landmarks. It completed the listing of MTN Nigeria on the Nigerian Stock Exchange and listed e-commerce joint venture Jumia on the New York Stock Exchange. And within three months of announcing its R15 billion asset realisation programme, it had already delivered R2.1 billion in proceeds. Amongst other disposals, it's selling its 53% stake in Mascom Wireless Botswana and its interest in global technology fund, Amadeus, as it simplifies its portfolio and repays debt.
The network operator also grew adjusted headline earnings per share by 12% in the six months to end-June - the first time in recent years it's managed growth of this magnitude.
However, it had to contend with a weak local economy and the introduction of new end-user requirements and the repricing of out-of-bundle data rates. Its local performance was also affected by late payments of R393 million for roaming services by Cell C, which it wasn't able to recognise under new accounting rules. It said it was evaluating a sustainable solution to the network roaming agreement with Cell C.
In Nigeria, economic activity was muted in the time of February's presidential elections and prior to the formation of the cabinet. In Iran, the rial weakened sharply after the re-imposition of US sanctions.
Although local subscribers declined, the group still added 7.7 million more subscribers over the six-month period, taking its total subscriber base to 240 million. Active data users increased by 3.5 million to 82 million, while its 30-day active Mobile Money users rose by 2.4 million to 30 million.
With revenue under pressure in SA, MTN benefitted from strong rises in in Nigeria, Ghana and Uganda. Group service revenue rose 9.7% to R67.9 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 10.2% to R31.2 billion - both on a constant currency basis. Reported headline earnings per share (HEPS) declined by 9.3% to 195c due to the impact of new accounting standards, interest on its Nigerian fine, and the effect of foreign exchanges gains and losses. It's raised its interim dividend by 11.4% to 195c per share.
Its shares fell 2.9% to R109.47 on Thursday.
Mtn out with results. Once again 4 eps numbers to choose from, ranging from +17 to -10%. Every day we get this. IFRS this and that, currency adjustments, constant currency, abnormal etc. Will the real eps please stand up. Not mtn fault. It is just what it is. Results look fair.-- Wayne McCurrie (@WayneMcCurrie) August 8, 2019
MTN results aren't great, so why did share rally recently? Annualised HEPS of around R4 means R60 share price at 15 PE.-- Dave Hazelwood (@hazelwood_dave) August 8, 2019