MTN expects big earnings boost

MTN said in a note on Monday (4 February) that it expects to report an improvement of at least 20% in headline earnings per share for the 12 months ended December 2018.

The operator, which has endured a difficult time over the past 12 months, particularly in its biggest market of Nigeria, said it expects to post an increase of 36.4 cents and 49.2 cents respectively in both headline earnings per share (HEPS) and attributable earnings per share (EPS) for the 12-month period.

This is compared to headline earnings per share of 182 cents and attributable earnings per share of 246 cents for the prior financial year.

MTN said it expects to publish its results on about Thursday, 7 March 2019.

The group’s share price has declined markedly over the past year, following ongoing issues with Nigeria’s regulators and monetary officials. MTN did, however, settle allegations that it illegally transferred $8.1 billion of funds out of Nigeria, at the end of December.

Bloomberg reported that the Central Bank of Nigeria’s decision to clear MTN of wrongdoing in its repatriation of dividends over an eight-year period meant it would cost the Johannesburg-based company just $52.6 million to satisfy Nigerian officials over their concerns with a 2008 private placement.

Nigerian authorities originally wanted a full reversal of the $8.1 billion of dividends.

However, MTN has had persistent run-ins with authorities as it chases big sales growth opportunities in Nigeria. There are still major hurdles for it to overcome in its largest market: it faces a Nigerian court hearing on 7 February over a separate claim that it owes $2 billion in back taxes.

Investors remain skeptical.

“The market is wondering when or if the Nigerian government will want to raid the MTN piggy bank again,” Nicholas Kunze, a money manager at Sanlam Private Wealth, told Bloomberg last month. “The market is asking when will this stop. It’s only two years since the last falling out.”

And according to Karin Richards, an independent trader based in Cape Town, the company is now uninvestable.

“Apart from anything else, the constant claims, all for massive amounts, must be absorbing an extraordinary amount of management time,” she said.

Read: Nigeria softens rules shielding banks from wireless rivals like MTN

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MTN expects big earnings boost