MTN Group expects half-year to June earnings to increase despite volatility in forex rates in key markets.
In its trading statement for the six-month period ended June 30, 2023, the second largest mobile operator said yesterday that its headline earnings per share (heps) were expected to rise by up to 10% to be between 506c to 557c, from 506c previously.
“Heps was negatively impacted by some non-operational and one-off items of approximately 207 cents, while in June 2022, it was 94 cents for the six-month period. These include hyperinflation excluding impairments of 38 cents, foreign exchange losses of 169 cents, and an International Financial Reporting Standards (IFRS) charge arising from the MTN Ghana localisation transaction,” the group said.
MTN said it noted the volatility in forex rates in key markets during the 2023 first half, including rand depreciation against the US dollar and the liberalisation of forex rates in Nigeria, the naira float.
“Within the aforementioned 169 cents of forex losses outlined in the above guidance, is 128 cents from Nigeria, of which approximately 95 cents was incurred in the month of June 2023, the month of the naira float,” it said.
MTN elected scrip dividend options for the 2022 financial year as regards MTN Nigeria and MTN Ghana in the period under review given limited forex reserves in both markets.
“For MTN Nigeria, the ordinary shares created from the scrip dividend election have been approved by Nigeria’s Corporate Affairs Commission and are awaiting final regulatory approval for the shares to be credited to the respective Central Security Clearing System accounts of qualified shareholders.
“For MTN Ghana, the allocation was completed towards the end of June 2023. Therefore, the impacts of the election of the scrip dividend options are not material in the first half 2023 results,” it said.
MTN said they would, however, be accretive to attributable earnings once all allocations are finalised, although this does negatively impact cash upstreamed to the group.
“These effects, particularly rand depreciation against the US dollar and election of the scrip dividend options, have thus also impacted the group’s holding company (Holdco) leverage in the period, which is anticipated to be towards the upper end of the guidance range of less than 1.5x.”
MTN Group said its consolidated net debt to Earnings before interest, taxes, depreciation, and amortization is anticipated to be broadly in line with the December 2022 level.
MTN expects to release its financial results on or about Monday, August 14.
On social media, investor Marlie Chunger said MTN’s share price increased by 1%. MTN shares traded at R139.16 and had decreased by 4.47% in the past six months.
“MTN is UP 1%… don’t say you never had a chance to exit. Not sure what’s holding it up right now as there wasn’t much to like in that interim,” he said.
Meanwhile, MTN Nigeria released its interim results and reported that the first half of 2023 was challenging as energy, food, and general inflation increased at high levels.
Nigeria, MTN's most profitable market said inflation in the country grew to reaching 22.8%.
MTN Nigeria said Mobile subscribers increased by 4% to 77.1 million, while service revenue increased almost 22% to N$1.2 trillion (about R26.4 billion), profit fell about 29% to about R2.8bn.
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