MTN Group, Africa’s biggest mobile-network operator by sales, fell the most in more than a year after a return to first-half profit after a US$1bn regulatory fine fell short of analyst expectations.
Headline earnings per share, which exclude one-time items, were probably R2.10 to R2.30 in the six months ended 30 June, the Johannesburg-based company said in a statement on Thursday. Analysts at Citi expected R2.60/share, they said in a note.
“The market expected a bit more, about 10% more in the numbers,” Peter Takaendesa, an analyst at Mergence Investment managers in Cape Town. “If you strip out the fine numbers and you just look at what they did operationally the numbers should have been a bit higher.”
The shares slumped as much as 10% and traded 9.3% percent lower at R115.36 as of 11.52am in Johannesburg.
While the numbers may have underwhelmed, the return to growth allows MTN to start moving beyond a tumultuous period that began with the Nigerian fine in October 2015.
Originally set at $5.2bn, that led to the resignation of the CEO and months of negotiations before it was eventually settled just over a year ago. New CEO Rob Shuter is focused on growing MTN’s largest markets including Nigeria and Iran.
While MTN and cross-town rival Vodacom are facing increased regulatory pressure in some African markets, both companies have the scale to benefit from some competitors beating a retreat from the continent. MTN is seeking to expand its services, and has held talks with Naspers’s TV services business MultiChoice about sharing content sharing. — Reported by Janice Kew and Loni Prinsloo, (c) 2017 Bloomberg LP
