MTN expects to report as much as 45% increase in full-year earnings, boosted by a significant 42% jump in profit at its Ghana operations.
Earnings per share (EPS) for the 12 months to end-December are seen rising by between 35% and 45% year on year to 1,030c-1,106c, the group said in a statement on Wednesday.
EPS includes impairments of about 44c relating to investments, goodwill and property, plant and equipment, and 70c on “remeasurement of disposal groups”, plus a net gain of 22c on the disposal of SA towers.
Headline earnings per share (HEPS) — which strips out one-off and exceptional items — for the 12 months to end-December is forecast to increase by 12% to 22% year on year to between 1,105c and 1,204c.
Still, certain one-time expenses and non-operational costs are expected to negatively impact earnings per share by about 159c. These expenses include adjustments for hyperinflation, foreign exchange losses, divestments, tax revisions and other non-operational items.
The group’s shares were down less than 0.1% to R144.71 at 12.18pm on the JSE.
Ghana operations
MTN Ghana, the group’s third biggest earner, reported mobile subscriber numbers grew 12.8% to 28.6-million, with service revenue up 28.3% to 9.9bn cedis (R14.05bn). Earnings before interest, tax, depreciation and amortisation (ebitda) increased by 30.9% to 5.6bn cedis.
Economic conditions have been less than favourable in Ghana with inflation as high as 54.1% in December, while the cedi depreciated 42.8% against the dollar in 2022. The country, which has benefited from a booming oil sector over the past decade, has since applied for a $3bn (R54.49bn) credit facility with the IMF.
“We will deepen our expense efficiency efforts and preserve liquidity as we navigate macroeconomic challenges. We give a medium-term guidance for service revenue growth in the low-twenties, in percentage terms,” management said in a statement, adding it remains committed to the business.
E-levy
Active mobile money users also increased, by 15% to 12.7-million, but the business has been hurt by the implementation of a 1.5% levy on mobile money transfers from May 1 last year.
As the use of mobile money facilities has grown, regulators have been devising ways to control or tax transactions on these platforms, though the country’s finance ministry reduced the levy to 1% from January.
MTN’s Ghana operation has also had to deactivate about a quarter of SIM cards on its network to comply with a directive from that country’s regulators on biometric registration.
The company reports that 1,504,366 of the 5,422,828 subscribers who had been disconnected had fully reactivated their SIM cards, completing the stage 2 registration by February 12.
The group was also heartened last month when authorities withdrew a R13bn tax claim. International relations & co-operation minister Naledi Pandor had come out in support of MTN in the matter.
The assessment by the Ghana revenue authority was for an amount of about 8.2-billion cedis, equal to about $665m at prevailing exchange rates, including penalties and interest charges.
MTN has in recent years been making an effort to comply with all regulations in the various countries in which it operates and avoid legal battles that it and pay-TV operator MultiChoice have had to deal with in Nigeria.
