MTN expects monster earnings
MTN has informed shareholders that it expects to report a significant earnings increase when it releases its interim results this week.
The company said its earnings per share for the six months ended 31 June 2022 would be 195% to 205% higher — from R1.48 last year to between R4.37 and R4.51.
Its headline earnings per share would be between R5.42 and R5.81, an expected 40% to 50% increase over the R3.87 it reported in June last year.
“Earnings per share includes impairment losses that mainly relate to goodwill totalling approximately 25 cents (2021: 73 cents), an impairment loss on remeasurement of disposal groups of 52 cents (2021: 2 cents) and a net loss on the disposal of SA towers of 45 cents (2021: 0 cents),” MTN stated.
The company said its headline earnings were negatively impacted by some non-operational and once-off items of approximately 94 cents (2021: 118 cents).
These include hyperinflation excluding impairments (2 cents), foreign exchange losses (88 cents) and an IFRS 2 charge arising from the MTN Ghana localisation transaction (4 cents).
MTN informed shareholders in mid-June that it was in early discussions to acquire Telkom’s entire issued share capital.
The company said it would buy Telkom in return for shares or a combination of cash and shares.
MTN’s shares rose sharply on the news, jumping over 7% on the day.
However, the company is still trading over 19% lower year-to-date, declining from around R172 per share on 3 January to R139 at market close on Friday.
South Africa’s second-biggest mobile network had a strong start to the year, with its share price surging over R200 for the first time in almost seven years in February 2022.
That was spurred by a reduction in debt for its holding company and solid performance in markets like Nigeria, which benefitted significantly from the rising oil price.
However, MTN’s gains were eroded after the Nigerian Communications Commission announced in April that all mobile operators had to restrict outgoing calls for subscribers with SIMs not linked to a National Identity Number.
Now read: Cell C says MTN’s proposed Telkom acquisition must be handled with care
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