MTN Group`s African operations have been turned around, helping the cellular network group achieve a surprising 91.5% increase in interim headline earnings per share.
The news boosted the MTN share, which was trading at R13.60 on the JSE by midmorning, up R1.30 or 10.57% from yesterday`s close.
Headline earnings per share rose to 60.9c in the six months to 30 September from 31.8c in the same period last year.
Despite a trading update promising good results, analysts were taken by surprise as they had anticipated a 40% increase to 45c a share.
MTN International, the division operating in Africa, recorded significant losses last year, but the latest results show that previous loss-makers Cameroon and Nigeria have become profitable.
The division`s revenue rose from R449 million to R2.97 billion with earnings before interest, taxation, depreciation and amortisation (EBITDA) of R1.06 billion.
MTN Group CEO Phuthuma Nhleko says all of MTN International`s operations contributed positively to after-tax profit.
"Notwithstanding these pleasing results, MTN International`s African operations face a number of ongoing challenges, which include managing the regulatory and political environment, currency volatilities and interconnect issues.
"Management, together with its local strategic partners, continues to address these issues in the respective countries."
Maturity
He says MTN SA continues to face a challenging and difficult economic environment. However, revenue rose 21% to R5.65 billion while EBITDA increased 13% to R1.64 billion.
"MTN SA faces a more maturing market and an increasingly competitive trading environment. Nevertheless the group anticipates that the performance of MTN International`s operations will contribute to ongoing growth.
"Overall, the board is confident that the group will continue to perform soundly against its set objectives. The group will continue to explore further African opportunities in line with its vision to become the leading provider of communication services on the continent."
MTN has also withdrawn a cautionary relating to its potential financial exposure following the liquidation of the CNA Group. "Based on further legal review of the position, it is now considered unlikely that the MTN Group will have any additional exposure other than already anticipated," Nhleko says.
A cautionary notice related to talks around a deal involving the non-South African assets is still in effect.
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