MTN reports 22% rise in first-half profit, beats market estimates

14 Aug 2013

South Africa-based regional wireless operator MTN Group has reported a 22% increase in profits for the six months ending 30 June 2013, beating market expectations, buoyed by a strong rise in its overall subscriber base. The Group’s so-called ‘headline earnings per share’, which excludes one-off exceptional items, reached ZAR6.54 (USD0.772) for 1H13, up from ZAR5.36 for the corresponding period of 2012, beating the median estimate for profit of ZAR6.49 per share, in a poll of analysts carried out by Bloomberg. MTN’s profit attributable to shareholders for the period under review was ZAR12.54 billion, compared to ZAR10.59 billion in 1H12. The Johannesburg-based company said that first-half revenue increased by 9.8% y-o-y to ZAR65.25 billion, from ZAR59.42 billion a year ago, despite being negatively impacted by tariff cuts in both Nigeria and South Africa. The Group’s so-called ‘Large OpCo Cluster’ and ‘Small OpCo Cluster’ operations reported a solid 9.7% and 24.7% y-o-y growth in revenue to ZAR13.92 billion and ZAR9.08 billion, respectively. However, MTN’s South African arm reported turnover was down 1.4% at ZAR20.15 billion, although its Nigerian operation booked turnover of ZAR22.30 billion, up from ZAR19.26 billion previously – on a reported basis. ‘Although operating conditions in South Africa are expected to remain difficult, we will continue to focus on competitive, value-added propositions and on improving cost efficiencies,’ the Group said in the statement. ‘We expect the group to add a total of 21.1 million subscribers for the full 2013 year.’

MTN’s total subscriber numbers across its operations in Africa and the Middle East increased 6.5% to 201.5 million in the year to 30 June 2013, although MTN South Africa reported a marginal decline in users to 25.0 million from 25.4 million at 31 December 2012. By contrast, MTN Nigeria continued to improve its performance, adding a net 3.8 million subscribers in Q1 and a further 3.9 million subscribers in Q2, bringing total subscribers at the end of June 2013 to 55.24 million (NB: in July, MTN Nigeria disconnected 3.2 million subscribers related to the regulator-driven subscriber registration process). Elsewhere, MTN Irancell closed out June with 42.0 million subscribers (+3.8%), MTN Ghana reported 12.6 million users (+7.3%), MTN Cameroon (7.6 million, +4.3%), MTN Uganda (8.0 million, +4.4%), MTN Syria (5.5 million, down 8.6%), MTN Sudan (8.4 million, +7.2%), and MTN Cote d’Ivoire added a net 493,000 users for a total of 6.6 million.

Cameroon, Ghana, Nigeria, South Africa, Sudan, Uganda, Cote d’Ivoire, Iran, Syria, MTN Group, MTN Uganda, MTN Cameroon, MTN South Africa, MTN Nigeria, MTN Cote d’Ivoire (incl. Afnet, Arobase), MTN Ghana, MTN Syria, MTN Irancell,

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