MTN expects earnings boost for FY 2022
Telecoms group MTN expects a sizeable jump in headline earnings when it reports it full year results for the year ending December 2022.
In a trading statement published on Wednesday (1 March 2023), the group said that it anticipates earnings per share (EPS) to increase between 35% and 45%, while adjusted headline earnings per share (HEPS) is expected to increase by 12% to 22% for the period.
MTN said that earnings were boosted by a net gain on the disposal of its SA towers business, contributing 22 cents per share, while also drawing net profits from disposals of other properties, plants and assets.
It is also expecting impairment losses to be reduced.
Headline earnings were negatively impacted by non-operational once-off items, it said, including adjustments for hyperinflation, foreign exchange losses and other items.
These once-off items accounted for a reduction of approximately -59 cents (2021: -123 cents) for 2022 HEPS, it said.
Regarding MTN’s Ghana dispute, on 13 January 2023, MTN informed shareholders that the Ghana Revenue Authority (GRA) issued MTN Ghana with a notice of assessment of tax liability.
The assessment was for an amount of GHS 8.2 billion (approximately R11.9 billion), including penalties and interest charges.
The GRA’s assessment infers that MTN Ghana under-declared its revenue by approximately 30% between 2014 and 2018.
However, on 3 February 2023, MTN said that the Ghana Revenue Authority (GRA) had fully withdrawn the tax assessment notice issued to MTN Ghana.
“MTN remains confident in the economy of Ghana and its future prospects and maintains its planned investment and developmental initiatives over the medium term to drive digital and financial inclusion,” the company said.
Considering the EPS of 763 cents for 2021, this translates to a range of 1,030 cents to 1,106 cents for 2022. the increase in HEPS from 987 cents in 2021 also translates to a range of 1,105 cents to 1,204 cents for the full-year 2022.
This is a positive sign from MTN, and Jonathan Fisher from PSG Wealth noted that turnover growth would at least be in the mid-teens, and the return on equity is set to reach 25%.
“The first half headline earnings per share (HEPS) was up 46%. If they can grow full-year HEPS by 30%, it puts them at around R12.87,” he said.
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