MTN shares hit R200 landmark

Shares in MTN Group broke through the coveted R200 level on the JSE on Wednesday (14 August), after the group’s results were perceived to better than analysts’ original forecasts.

Shares in MTN closed at R199, representing a new all-time high for the group, having hit an intraday best level of R200.90, and giving the Africa’s largest mobile operator a market cap of  R374.50 billion.

On Wednesday, the group reported a 9.8% rise in revenue in interim results for the six months ended June 2013, to R65.248 billion, while operating profit grew marginally to R19.596 billion, from R19.184 billion before.

Headline earnings per share increased 22% to 654 cents, and group ebitda increased by 6.4% to R27.743 billion.

MTN declared an interim dividend per share of 370 cents, up 15.3%.

Group subscribers increased 6.5% in the interim period, to 201.5 million, supported by competitive offerings and increased network capacity, MTN said.

An analyst at PSG Konsult pointed to MTN’s growth in its data. “MTN’s results were better than expected, which enabled the group to reach a new high. The big story is the growth in its data, which is now more than Vodacom.”

MTN said group data revenue increased by 36.9% as the number of data subscribers reached 65.4 million, an increase of 29.5% on the prior year.

Data contribution to total revenue was 13.9%, (18.0% including SMS) and the upward trend is expected to continue, it said.

The analyst added that investors were also likely cheered by the group’s dividend increase, adding that he expected the group to break through R200 in the coming sessions.

Nadim Mohamed, investment analyst and partner at First Avenue Investment Management said he was a bit surprised at the positive market reaction to the results.

He said that if one strips out the effect of foreign exchange movements and reclassification of the MTN Syria intergroup loan, revenue declined 1.9% in constant currency terms.

Mohamed cautioned that the effect of regulatory intervention in its markets, especially South Africa and Nigeria, is evident with average price per minute down 29.5% across all ops in US dollar terms.

“MTN has however guided that H2 will be better and perhaps this, together with the dividend, increase is the basis for the positive market reaction,” Mohamed said.

Looking ahead, MTN said it expects to deliver improved YoY organic growth in both revenue and ebitda.

“The recovery in our Nigerian operation is expected to continue over the second half, supported by a strong capital expenditure programme. We expect the group to add a total of 21.1 million subscribers for the full 2013 year.”

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MTN shares hit R200 landmark