/ 9 March 2011

MTN full-year profit up

South Africa’s MTN Group posted a 20% rise in full-year profit on Wednesday and sharply lifted its dividend payment, as it benefited from strong subscriber growth in emerging markets.

MTN, Africa’s largest cellphone operator, said adjusted headline earnings per share totalled 909,1 cents for the year to end-December compared with 754,3 cents a year earlier, at the top end of its own forecasts for an increase of between 18% and 23%.

Headline EPS is the main gauge of profit in South Africa, and excludes certain one-time items.

While cellphone operators in fast-growing Africa avoided the brunt of the global economic crisis, they are faced with stiff competition and even swings in commodity prices, key to the health of some major African markets.

India’s Bharti Airtel, in particular, has been ramping up pressure on competitors such as MTN through a price war.

MTN, which operates cellphone networks across Africa and the Middle East, said its users grew 22% to 141,6-million. MTN Nigeria recorded a 25% rise in subscribers to 38,7-million and Iran users increased 28% to 29,7-million.

South Africa had growth of 17,3% to 18,8-million.

The group declared a final dividend of 349 cents per share, bringing its total dividend for the year to 500 cents. The company has said it aims to return more cash to shareholders as it sees fewer opportunities for acquisitions.

“Due to the limited number of [value accretive] opportunities, the board is confident that growth aspirations can be accommodated within the imperative of improved short-term returns to shareholders,” said outgoing CEO Phuthuma Nhleko, who is due to be replaced by COO Sifiso Dabengwa in March.

MTN said its revenue rose 2,5% to R114,7-billion.

Shares in the company have fallen 6% so far this year, underperforming a 1,9% rise in the Johannesburg Top-40 index. — Reuters