/ 1 January 2002

MTN says sees higher first-half

South African mobile phone operator MTN Group Ltd said on Friday it expected to report higher first-half earnings, sending its share up as much as 7,9% to its strongest level in about five months.

MTN — which owns South Africa’s second largest network, and is on an aggressive expansion drive on the continent — said headline earnings per share for the six months to end-September would be ”materially higher” than the same period last year.

It would post interim results after the market close on November 26.

Headline earnings strip out exceptional items and their tax effects. In the first half of last year, MTN reported headline earnings of 32,6 cents a share — up 5,5%.

At 0749 GMT, MTN was up 4,6% at R12,60 — after briefly hitting R13. It outperformed a 0,3% fall in the broader market.

Rhys Summerton, an analyst at Salomon Smith Barney, said the news was mostly in line with what he had expected. Summerton, with an ”outperform” recommendation on MTN, forecast a 25% rise in MTN’s first-half headline EPS.

”The market shouldn’t misread it. Basically they are saying we’ve returned to growth. I’ll be very surprised if they report a 50% rise, for example.”

Summerton said he expects MTN’s revenues to rise 44% to R7,4-billion in the first half, thanks to its Nigerian operations.

”That should filter through to an EBITDA improvement of 27%, and an EBITDA margin of just under 30%,” he added. – Reuters