MTN posts lower H1 profits, reports improved operational performance

8th August 2018 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

MTN posts lower H1 profits, reports improved operational performance

Photo by: Bloomberg

Telecommunications giant MTN on Wednesday posted improved financial results on a constant currency basis for the first half of 2018, with growth achieved in service revenue and an increase in margins on earnings before interest, taxes, depreciation and amortisation (Ebitda).

For the six months ended June 30, the company posted a 17% rise in Ebitda on a constant currency basis to R22-billion and a 10.2% increase in service revenue to nearly R59-billion.

However, on a reported basis, Ebitda contracted by 9.9% and service revenue declined by 3.4%.

In the first half, MTN’s Ebitda margin expanded by 2.2 percentage points to 35.5%.

Reported basic headline earnings per share (HEPS) declined to 215c in the six months under review, from 231c in the first half of 2017, owing to a cut of 21c in the contribution from associates and joint ventures.

HEPS were also impacted on by 17c relating to the Nigeria fine interest, from 24c in the corresponding period in the first half of 2017; hyperinflation of 27c, from 42c last year; and the impact of foreign exchange losses and gains of 21c, from 49c the year before.

HEPS, excluding these items, declined to 280c in the first half, from 346c in the prior comparable period.

“MTN had an encouraging first half of 2018, with an acceleration in the second quarter, supported by an improved operational performance across many markets,” group president and CEO Rob Shuter said on Monday.

“We resolved some key regulatory issues in Cameroon and Benin, launched the initial public offering (IPO) of MTN Ghana and made progress on the IPO of MTN Nigeria. As part of our ongoing portfolio review, we agreed to the sale of MTN Cyprus,” he added.

MTN Cameroon renegotiated its licence agreement as part of an addendum for the use of fourth-generation spectrum. MTN Benin concluded a memorandum of understanding with the government, as well as negotiations around future frequency fees.

“Despite continued challenges in repatriating funds from MTN Irancell, the board remains committed to plans to declare a total dividend of 500c a share for 2018 and is targeting growth of 10% to 20% over the medium term,” Shuter noted.

MTN Group has repatriated approximately €88-million from MTN Irancell, including €61-million relating to the full 2017 dividend due to MTN, as well as a further €27-million of historic dividends.

MTN declared an interim dividend of 175c a share.

As at June 30, MTN had 223.4-million subscribers, compared with 217.2-million reported at the end of 2017, with 71.2-million active data users.