RESULTS: MTN

Johannesburg, Mar 11 (I-Net Bridge) - South African telecommunications company MTN on Thursday reported a 16.6% decline in adjusted headline earnings per share to 754.3 cents for the year ended December 2009 from 904.4 cents a year ago. Basic HEPS declined to 803.2 cents from 836.5 cents a year ago. Excluding the impact of the functional currency losses, adjusted HEPS increased by 8.5% to 878.9 cents, it said.

Revenue was up 9.2% to 111.9 billion rand as group subscribers grew 28% to 116 million, indicating a continuing demand for mobile services in countries where mobile penetration is still relatively low, the company said.

A dividend of 192 cents per share was declared.

Earnings before interest, tax and depreciation (EBITDA) rose by 6.7% to 46.1 billion rand based on a sound operational performance for the year.

MTN said that movements in exchange rates, mainly the rand and Nigerian Naira, had a substantially negative impact on the results.

Had there been no change in currency rates during the year, reported revenues at year end would have been 11 percentage points higher, and EBITDA 12 percentage points above those reported, it added.

It said the solid performance of MTN operations in most of the countries in which the group has a presence was achieved despite economic challenges, increased regulatory changes and growing competition.

“Continued delivery in accordance with an aggressive network rollout strategy remained key throughout 2009, enabling MTN to maintain or improve its market share in most of its operations. Better distribution and a focus on segmental product offerings were other contributory factors,” it said.

MTN’s extensive network expansion and investment strategy resulted in capital expenditure for the year of 31.2 billion rand - a 10.6% increase on 2008.

During the year, MTN Group concluded the acquisition of 100% of Verizon South Africa and 59% of iTalk Cellular, increased its stake in MTN Uganda from 95% to 97% and acquired a 20% stake in Belgacom International Carrier Services in exchange for selling 100% of its own international carrier service business.

It was announced recently that Phuthuma Nhleko will not be renewing his long term contract as President and CEO which ends in June 2010. He has, however, agreed to continue in his current role up to March 2011 focusing on certain key objectives including the seamless transition to a successor over this period. A board process is underway to appoint his successor.

Looking ahead, MTN said competition across MTN’s footprint is likely to continue to increase and while economies remain fragile, there are tentative signs of a recovery in economic activity.

MTN will remain focused on actively seeking value-accretive expansion opportunities in emerging markets to reduce concentration risk and leverage economies of scale, it said.

It will also monitor infrastructure investments to ensure appropriate levels of capacity and quality of service and remains focused on the continued investment in fibre and cable requirements to service evolving voice and data requirements.

It also remains focused on optimising efficiencies including infrastructure sharing, standardisation of systems and processes, rationalisation of suppliers, cost management and cash optimization and continued engagement with regulatory authorities in the development and refinement of the telecommunications sector, as well as the implementation of MTN’s BEE transaction, the group concluded.

I-Net Bridge, Tel: +27-11-280-0644, newsdesk@inet.co.za

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