MTN to report higher earnings


MTN to report higher earnings

Published Date: 2020-02-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

MTN to report higher earnings

Full-year results will be distorted by the adoption of new accounting standards and a number of non-operational items.

MTN expects to report a strong rise in full-year headline profit, although its results will be skewed by the introduction of new accounting standards.

In a trading statement, the network operator said it had adopted IFRS 16, which affects how leases are accounted for, but hadn't restated comparative numbers from 2018. It said the move had resulted in a a 13% reduction in its reported earnings numbers due to the net effects of lower operating lease costs, higher finance costs and higher depreciation charges.

Under IFRS 16 it will report growth in headline earnings per share (HEPS) of between 30% and 50%, while earnings per share (EPS) will be flat to 10% higher. It said HEPS were negatively impacted by non-operational times totalling about 127c per share.

On a like-for-like basis, using the old IAS 17 accounting standard, it said HEPS would be up by between 55% and 75%, while EPS would rise by 15% to 25%.

Non-operational items for the year included costs relating to interest on regulatory fines at MTN Nigeria, hyperinflation adjustments, net foreign exchange losses, a impairment at its Iran operation and the impact of divestments made during the year.

MTN's shares closed 0.3% higher at R83.11. The trading statement was released after the close of trade.

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