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MTN returns to FY profitability

JSE-listed MTN on Thursday posted a turnaround in its earnings for the year ended December 31, with a full-year return to profitability after plunging into the red last year for the first time in its two-decade history.

Reported headline earnings per share (HEPS) for the year under review climbed to 182c, compared with the headline loss a share of 77c in 2016 when a Nigerian regulatory fine shaved off 500c.

In 2016, the Nigerian regulatory fine interest reduced HEPS by 46c, while hyperinflation adjustments excluding impairments of 96c, net foreign exchange losses of 159c, the MTN Zakhele Futhi share-based payment expense of 24c and a loss on the derecognition of a loan to an IHS tower subsidiary of 158c added to the number of one-off and noncash post-tax items totalling 483c that had negatively impacted on HEPS.

Earnings a share for 2017 increased to 246c, a turnaround on the loss a share of 144c recorded in the prior year.

MTN also posted a profit after tax of R4.5-billion in 2017, compared with the loss after tax of R3.1-billion in 2016.

“MTN delivered a solid overall performance for the year, with progress on many fronts, despite difficult economic conditions as well as operational and regulatory challenges in certain markets,” group president and CEO Rob Shuter said on Thursday.

Earnings before interest, taxes, depreciation and amortisation were up 15.2%, from R40.7-billion in 2016 to R46.9-billion in 2017.

Revenue declined by 10.2% to R132.8-billion in the year under review and service revenue fell 10.8% to R124.4-billion.

On a constant currency basis, group revenue expanded by 6.8% and service revenue grew by 7.2%, underpinned by 11.2% growth in service revenue in Nigeria and a 3.9% growth in service revenue in South Africa.

MTN Nigeria showed strong constant currency revenue growth and MTN South Africa’s postpaid business displayed encouraging improvements, said Shuter.

MTN Uganda, MTN Ghana and MTN Ivory Coast also contributed positively to the group’s top-line growth on a constant currency basis.

Meanwhile, MTN is progressing its preparations for the listings of MTN Nigeria and MTN Ghana on the Nigerian Stock Exchange and the Ghana Stock Exchange respectively.

“Extensive local marketing to target Nigerian investors is planned as part of a retail offer and institutional bookbuild, which may also involve selected international institutions,” Shuter noted, adding that the listing is planned for 2018 subject to appropriate market conditions and requisite regulatory approval.

“MTN Ghana is also moving forward with its localisation and we expect this process to be completed in the first half of 2018,” he said.

The listing of MTN Ghana forms part of the terms of the company’s 4G licence, under which MTN Ghana is required to introduce Ghanaian investors as shareholders.

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