Mobile operator MTN says it expects its half-year results to be negatively impacted by a number of non-operational and one-off items.
The group said in a trading statement for the six-month period ended June 2021, that it expects headline earnings per share to decline by 5% – 15%, or 22 cents and 65 cents per share.
Considering the HEPS of 430 cents for the corresponding six-month period ended June 2020, this translates to a range of 366 cents to 409 cents for the six-month period ended June 2021.
It expects to report a decrease in earnings per share (EPS) of between 75% and 85% (or 506 cents to 573 cents).
Considering the EPS of 674 cents for the corresponding six-month period ended 30 June 2020, this translates into a range of 101 cents to 169 cents for the six-month period ended 30 June
2021, MTN said.
EPS includes impairment losses that relate mainly to MTN Yemen, largely non-cash losses from the deconsolidation of subsidiary MTN Syria of approximately 262 cents, and a gain on the fair value uplift on consolidation of the group’s equity accounted investment in aYo.
HEPS, MTN said, were negatively impacted by a number of non-operational and one-off items. These include items largely relating to foreign exchange losses, and noteworthy donations related to Covid-19 support for the Africa Centre for Disease Control and Prevention (CDC) and the Coalition Against Covid (CACOVID) task force in Nigeria.
The group was also forced to temporarily close more than 100 stores in Gauteng and KwaZulu-Natal during the riots and looting in those areas in July. This impact, however, will only reflect in future earnings updates.
Update on cash upstreaming
MTN said it has made meaningful progress in strengthening its financial position, maintaining a healthy liquidity position and faster de-leveraging of the holding company (Holdco) balance sheet.
This has been supported by upstreaming approximately R9.3 billion in cash from its operating companies (Opcos), including R4 billion from MTN Nigeria, in the six months to 30 June 2021. Post the period end, MTN said it has received a further R0.7 billion in cash from Nigeria to date.
On Friday MTN Nigeria published results for the half-year ended June 2021, showing that mobile subscribers declined by 7.6 million to 68.9 million, impacted by the regulatory restrictions on new SIM sales and activations.
Active data users declined by approximately 52,000 to 32.5 million, it said, however, service revenue was up by 24.1% to N790.3 billion.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 27.6% to N417.2 billion. The group said that its EBITDA margin improved by 1.4 percentage points (pp) to 52.7%.
MTN said it expects to publish its group financial results on Thursday, 12 August.