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Africa|Business|Defence|Financial
Africa|Business|Defence|Financial
africa|business|defence|financial

MTN expects decline on half-year earnings

2nd August 2021

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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Telecommunications group MTN expects a decline in earnings for the six months ended June 30, 2021.

In a trading update to shareholders on August 2, the group said it anticipates a 75% to 85%, or 506c to 573c, drop in earnings per share (EPS) for the six months under review to between 101c and 169c.

The EPS includes 75c in impairment losses related mainly to MTN Yemen, largely non-cash losses valued at 262c from the deconsolidation of subsidiary MTN Syria and a gain on the fair value uplift on consolidation of the group’s equity accounted investment in aYo of 96c.

Headline earnings per share (HEPS) are likely to contract 5% to 15%, or 22c to 65c, to between 366c and 409c, negatively impacted by a number of nonoperational and one-off items totalling 118c apiece.

This includes 93c largely relating to foreign exchange losses and 25c from noteworthy donations related to Covid-19 support for the Africa Centre for Disease Control and Prevention and the Coalition Against Covid task force in Nigeria.

“MTN has made meaningful progress in strengthening its financial position, maintaining a healthy liquidity position and faster deleveraging of the holding company balance sheet,” the company said in a trading update.

“This has been supported by upstreaming of about R9.3-billion in cash from its operating companies, including R4-billion from MTN Nigeria, during the six months to June 30.”

MTN has received a further R700-million in cash from Nigeria post the reporting period.

Meanwhile, MTN reported that, on July 30, the magistrate judge recommended the dismissal of a case against MTN Dubai and MTN Afghanistan over a 2019 civil case filed against it for claims for civil monetary relief under the US Anti-Terrorism Act.

The MTN defendants, on February 5, filed a motion to the court to dismiss the complaint as the court lacks jurisdiction over the defendants, which do not operate in the US, and the complaint does not allege any conduct by MTN defendants that violated the Anti-Terrorism Act.

“The magistrate judge to whom the case had been referred made a recommendation to the district judge presiding over the case to grant the motion to dismiss for all defendants in the case, including as submitted by MTN Defendants. The magistrate judge further concluded that the court did not have jurisdiction over MTN Defendants,” MTN said in the statement.

Under the US court’s procedures, the plaintiffs are permitted to file objections to the report with the district judge and MTN will have an opportunity to respond.

“MTN is in the process of studying the full report with its legal counsel, however, the company is pleased with this positive development supporting MTN’s strong defence and arguments with regards to its motion to dismiss. MTN conducts its business in a responsible and compliant manner in all its territories and will continue to defend its position where necessary,” MTN concludes.

Edited by Creamer Media Reporter

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