MTN profit up 21%, pays dividend

Johannesburg - MTN Group [JSE:MTN], Africa's largest mobile operator, posted a 21% rise in first-half profit on Thursday and paid a mid-year dividend for the first time, in line with a new strategy that no longer emphasises growth by acquisitions.

The company said adjusted headline earnings per share totalled 438.6 cents in the six months to end-June, compared with 363.8 cents in the same period a year earlier.

MTN, the largest company with a primary listing in Johannesburg, said last week it expected adjusted headline EPS to increase by 18% to 23%.

The firm said it would pay an interim dividend of 151 cents per share.

Although built on aggressive acquisitions, MTN has said it will now concentrate on paying out more to shareholders, as it sees fewer potential targets in emerging market telecoms.

An attempt to acquire the Algerian unit of Egypt's Orascom Telecom was thwarted in June by Algeria's government, which wanted the company for itself.

While MTN has operations in 21 countries, most of its revenue comes from South Africa, Ghana, Nigeria and Iran. Analysts say it still needs to bulk up in other markets, especially because of increased competition from India's Bharti Airtel.

Bharti, which acquired the African assets of Kuwait's Zain this year, has said it will invest at least $1.1bn on its sub-Saharan business.

MTN said revenue fell 2.2% to R56bn, hurt by a stronger rand. Total subscribers rose 11.4% to R129.2m.

It also said its capital expenditure in the first-half dropped by R7bn, to R8.5bn.

Headline EPS is the main gauge of earnings in South Africa and excludes certain financial items.

Shares of MTN are little changed so far this year, outperforming a 3.2% decline in Johannesburg's Top-40 index.