SOUTH AFRICA: Africa's biggest cell phone operator MTN Group boosts year profits to buy Musica outlets

Record ID: 452996

  • Title: SOUTH AFRICA: Africa's biggest cell phone operator MTN Group boosts year profits to buy Musica outlets
  • Date: 13th March 2009
  • Summary: (AD1) JOHANNESBURG, SOUTH AFRICA (MARCH 12, 2009) (REUTERS) WIDE OF MTN HEADQUARTERS FLAGS OF COUNTRIES THAT MTN OPERATES IN MTN CEO PHUTHUMA NHLEKO TALKING TO JOURNALIST (SOUNDBITE) (English) PHUTHUMA NHLEKO, MTN CEO, SAYING: "Well, we are fairly satisfied. We think that its results that were produced in a very difficult year. And we suspect 2009 is going to be more difficult. But we think we're well positioned to weather the storms." NETWORK ROOM MAP (SOUNDBITE) (English) PHUTHUMA NHLEKO, MTN CEO, SAYING: "Look I think we must accept that we are...we have some degree of good fortune in this instance. The mobile industry in general is quite resilient because in emerging markets we're really servicing countries that are quite reliant on the mobile telecommunications infrastructure because their fixed line infrastructure is either very small or poor. So that gives us a certain degree of resilience. NETWORK INDICATORS (SOUNDBITE) (English) PHUTHUMA NHLEKO, MTN CEO, SAYING: "You know, for at least another two years or more we believe that the penetration in those countries is relatively low compared to what we can do. You've seen the 2008 growth, I know it's only the beginning of the year but we've shared with you growth for two months. And the traffic growth as well. So, is it sustainable? Well, we can't have it forever, but certainly in the medium term I think we're still going to see significant growth coming out of this company." DISPLAY SHOWING MTN 2010 LOGO FLAGS OF COUNTRIES THAT MTN OPERATES IN EXTERIOR OF MTN HEADQUARTERS
  • Embargoed: 28th March 2009 12:00
  • Keywords:
  • Location: South Africa
  • Country: South Africa
  • Topics: Communications,Economic News
  • Reuters ID: LVADL8Z1YDNXMMLU12U2E9R4PQ0L
  • Story Text: Africa's biggest cell phone operator by subscribers, MTN Group boosts full year profits and said it was cautiously optimistic about its prospects for 2009.
    Cell phone operator MTN Group Ltd increased its adjusted headline earnings last year thanks to rapid user growth, especially in Iran and Nigeria, and said it will buy up to 17 Musica retail outlets from New Clicks.
    MTN, Africa's biggest mobile phone operator by subscribers, also said it was cautiously optimistic for 2009.
    "Well, we are fairly satisfied. We think that its results that were produced in a very difficult year. And we suspect 2009 is going to be more difficult. But we think we're well positioned to weather the storms," said the group's CEO, Phuthuma Nhleko.
    The group, which operates mobile phone networks across Africa and the Middle East, increased its mobile subscribers by 48 percent -- 5 percent lower than 2007 subscriber growth -- to 90.7 million to cement its market leading position in Africa.
    "Look I think we must accept that we are...we have some degree of good fortune in this instance. The mobile industry in general is quite resilient because in emerging markets we're really servicing countries that are quite reliant on the mobile telecommunications infrastructure because their fixed line infrastructure is either very small or poor. So that gives us a certain degree of resilience" Nhleko added.
    MTN said its Iran business lifted subscribers to 16 million from 6 million a year earlier. Market share rose to 37 percent from 23 percent.
    Nigerian subscribers rose 40 percent to 16.5 million.
    Operations in Iran were launched late in 2006, drawing investor concern about MTN's decision to invest given Teheran's nuclear stand-off with the West.
    "You know, for at least another two years or more we believe that the penetration in those countries is relatively low compared to what we can do. You've seen the 2008 growth, I know it's only the beginning of the year but we've shared with you growth for two months. And the traffic growth as well. So, is it sustainable? Well, we can't have it forever, but certainly in the medium term I think we're still going to see significant growth coming out of this company," said Nhleko.
    Adjusted headline EPS -- which is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items -- rose to
    4 cents per share.
    MTN shares gained 2.83 percent to 94.09 rand by 0757 GMT, while Johannesburg's JSE Securities Exchange's Top-40 blue-chip index stood 1.4 percent lower.
    The stock has lost 28 percent in the past year compared to the Top-40's 40 percent fall. MTN is planning to buy 17 Musica stores to grow its South African branded store distribution footprint in key locations.
    The South African-based company said revenue rose 40 percent to 102.5 billion rand and earnings before interest, tax, depreciation and amortisation (EBITDA) was up 36 percent to 43.2 billion rand (4.25 billion US dollars).
    MTN said its net debt decreased by 3.2 billion rand to 12.9 billion rand, while its cash balance was at 28.7 billion rand. The company declared a dividend of 181 cents per share.
    MTN, which is actively seeking value-accretive expansion opportunities, said it was actively seeking infrastructure, transmission and site sharing opportunities across its operations.
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