MTN beats profit estimates as it eyes double-digit growth

Rapid growth in MTN’s African ensured the mobile operator beat the market’s profit estimates in its year to end-December, with the group saying it is optimistic that it will generate double digit revenue growth in 2020 as it ramps up spending on infrastructure.

Service revenue grew by almost a quarter in Ghana during the company’s 2019 financial year, offsetting a lacklustre performance in SA, where discontinued promotions resulted in a 7.3% fall in subscriber numbers.

Group operating profit rose by almost a third to R31.29bn, compared with R30.66bn expected in the Bloomberg consensus. After-tax profit climbed 11.6% to R10.69bn.

Group service revenue rose 9.8% in constant-currency terms, led by 22.9% growth in MTN Ghana and 12.6% growth in MTN Nigeria, while SA saw revenue growth of only 0.4%.

Subscribers in SA fell to 28.9-million from 31.2-million previously, with the group saying it had discontinued its loss-making 1GB acquisition promotions, which led to savings of over R80m.

At a group level, MTN added 18.2-million subscribers, with 251-million at the end of December.

“The group’s results were supported by double-digit growth in service revenue by both MTN Nigeria and MTN Ghana, while economic pressure, new data usage rules and a reassessment of recognition criteria for roaming revenue from Cell C impacted our performance in SA,” said CEO Rob Shuter.

MTN said on Wednesday Schuter will step down from his position at the end of his fixed four-year contract in March 2021.

The group upped its total dividend 10% to 550c and plans to increase its capital expenditure in 2020 by 13% to R28.5bn.

gernetzkyk@businesslive.co.za