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Mobile operator MTN forecasts robust earnings as the company advances its Ambition 2025 strategy

MTN, which recently bolstered its management team and is in the midst of brand refresh that will position it as a technology company, cautioned shareholders on Friday that its annual profit was expected to leap up to 35 percent. Photo: REUTERS/Afolabi Sotunde/File Photo

MTN, which recently bolstered its management team and is in the midst of brand refresh that will position it as a technology company, cautioned shareholders on Friday that its annual profit was expected to leap up to 35 percent. Photo: REUTERS/Afolabi Sotunde/File Photo

Published Feb 21, 2022

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PAN-AFRICAN mobile operator MTN, which recently bolstered its management team and is in the midst of brand refresh that will position it as a technology company, cautioned shareholders on Friday that its annual profit was expected to leap up to 35 percent.

The company announced key management changes in December as it positions itself for sustained growth and greater relevance, underscored by its Ambition 2025 strategy. It plans to advance to a post-Covid-19 environment with a focus on accelerating growth in the core connectivity business, deleverage debt, and drive the structural separation of its fintech and infraco assets.

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For the year ended December 2021 MTN forecast a hike in headline earnings per share (Heps) of between 25 and 35 percent to a range of 936 cents to 1 011c, which includes the negative impacts of a number of non-operational and once-off items with a net total of 123c, compared to 2020's 128c the prior year.

These items were related to hyperinflation excluding impairments, of -42c; foreign exchange losses of 111c; other non-operational items of 30c and notable donations related to Covid-19 support for the Africa Centre for Disease Control and Prevention and the Coalition Against Covid task force in Nigeria, totalling 24c.

MTN, which left Yemen and Syria to simplify its portfolio and focus on a Pan-African strategy, said its earnings per share would be between 15 percent and 25 percent lower in a range of 710 cents to 804 cents for the reporting period.

Earnings per share (Eps) included impairment losses of 64c, from 61c in 2020 that related mainly to MTN Yemen, largely non-cash losses from the deconsolidation of subsidiary MTN Syria of 262c.

MTN, which boasts more than 272 million customers in 20 markets mostly in Africa and the Middle East, earlier this month said it would unveil its new identity from February 27, forming part of its “Ambition 2025” strategy and to create “leading digital platforms for Africa's progress.”

This as MTN reinforced its team. In December it thanked Godfrey Motsa, the chief executive of MTN SA, who would step down after almost five years in the role, “during a time when the business built a leading network position and improved its competitive position in the consumer postpaid and enterprise businesses”.

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Charles Molapisi took on the role on January 1, with the expertise to deliver “second-to-none networks and platforms”. He stepped down as former chief technology and information officer, now led by Mazen Mroue.

MTN said Motsa would be available until the end of June 2022 to ensure a smooth handover and transition.

MTN said its core connectivity business would be streamlined into South Africa, Nigeria and markets comprising West and Central Africa, South and East Africa as well as the Middle East and North Africa. Ebenezer Asantl leads as the senior vice-president of Markets, with overall profit and loss responsibility for the three regions.

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Jens Schulte-Bockum, the chief operating officer, is now in charge of driving the faster scaling of all platforms other than fintech. The digital, infraco, enterprise services network as a service and Chenosis platforms all started reporting to Schulte-Bockum this month to “ensure strategic coherence and execution of both fintech and ayoba, as both businesses scale over the medium term.”

MTN has also been busy unlocking value for its shareholders.

In November, MTN Nigeria unveiled a public offering of just under 3 percent of shares in MTN Nigeria, its biggest market, saying it was on track to reduce holding company debt, raising hopes of dividends after a two-year break.

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Earlier this month, it announced the closure of its Series 1 offer for sales of shares to the public, allotting 661.3 million shares to investors in a transaction that saw subscription exceed offer by 139.5 percent.

Last year, the Central Bank of Nigeria granted approval in principle for MTN Nigeria to operate its proposed Mobile Money (MoMo) service.

Meanwhile, MTN South Africa announced a R6.4 billion sale of 5709 towers to Lagos-based IHS Towers, one of the world's largest providers of telecoms infrastructure.

The share price closed 0.27 percent lower at R182.72 on Friday, but up 111.97 percent in three years.

The group is expected to announce its annual results for the year-ended December 2021 on March 9.

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