MTN full-year profit gains on rising subscribers and weaker rand
MTN Group, Africa’s largest wireless operator, said full-year profit rose 27%, exceeding estimates, after the South African rand weakened and subscriber numbers rose.
Headline earnings per share, which exclude one-time items, were R13.86 in 2013, compared with R10.89 a year earlier, the Johannesburg-based company said in a statement on Wednesday. That beat the R13.40 median estimate by 16 analysts in a Bloomberg survey. Sales advanced 12% to R136.49-billion and the rand weakened 18% against the US dollar during the year, the company said.
Total subscribers increased 9.8% to 207.8-million, supported by 9.3-million net additions in Nigeria, its biggest market, and further growth in smaller African markets such as Ghana and Côte d'Ivoire.
South African customer numbers declined after weak consumer spending and tough competition hampered the business in Africa's largest economy.
"While the South African business delivered disappointing results, the executive team is focused on helping this business deliver an improved overall performance in the year ahead," the company said in the statement. "Value-accretive M&A opportunities will continue to be explored in line with our strategy."
MTN shares advanced 2.1% to R199.34 by the market close in Johannesburg on Tuesday, the highest since February 19. The stock has declined 8.2% this year, compared with a 7.8% fall at main competitor Vodacom Group.
South African wireless companies are looking at Internet access across Africa as consumers increasingly use more profitable data-enabled smartphones and domestic voice service revenue declines. MTN is in talks with fixed-line specialist Telkom SA about an infrastructure sharing arrangement for the two companies' mobile units, two people familiar with the matter said in December.
MTN has been under pressure from regulators in Nigeria, where it was fined last month for poor service, while the company is seeking legal action in South Africa over plans to halve mobile termination rates, or the amount it can charge smaller competitors to use its network. – Bloomberg