MTN earnings boosted by foreign exchange gain

MTN group headquarters. (M&G)

MTN group headquarters. (M&G)

MTN Group, Africa’s biggest mobile-phone company, said 2013 earnings per share jumped 25% to 30%, boosted by a foreign exchange gain of about R1.1-billion. 

The increase was mainly a result of a currency gain in MTN Mauritius, the Johannesburg-based company said in a statement on Thursday. MTN made a foreign exchange loss of about R2.7-billion the previous year.

"It is a positive trading statement, ahead of our estimates of a 20% increase," Kate Turner-Smith, a Cape Town-based analyst at BPI Capital Africa, said in a phone interview. "MTN benefits from a weaker rand."

MTN generated about 31% of sales in South Africa during the first half of last year, with the rest coming from operations in other markets including Nigeria.
The rand was the worst performing major currency against the dollar in 2013, weakening 19% in the period, according to data compiled by Bloomberg.

The foreign currency gain for 2013 "translates to about 60 cents, which would take our headline earnings per share estimate to 14.03 rand per share, the lower limit of the trading statement range," Turner-Smith said. MTN said earnings per share excluding one-time items rose 1.9% to R10.89 in 2012, according to a statement last year.

MTN shares fell 1.8% to R197 as of 12:26 pm in Johannesburg, valuing the company at R369-billion. The stock has declined 9.2% this year, compared with a 12% fall at Vodacom Group, the South Africa market leader. – Bloomberg

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