MTN Group said its Iranian business is still able to achieve strong sales growth in the short term, even as the unit battles to overcome ongoing US sanctions and the rapid spread of the coronavirus.
Africa’s largest wireless carrier is finding it tough to take money out of its second biggest market by subscribers due to measures re-imposed by US President Donald Trump, according to chief financial officer Ralph Mupita. As a partial solution, the Johannesburg-based company allows the Iranian unit to convert earnings into loans from MTN rather than send them to the parent company, he said.
“This has placed MTN Irancell in a position where it has enough cash to continue funding its network expansion, even during these tough times,” the CFO said in an interview.
MTN has seven reported cases of employees testing positive for Covid-19, the illness caused by the coronavirus, according to Mupita. Iran has suffered the third biggest hit in the world from the pandemic, with more than 16 000 people infected.
“We have implemented work-from-home measures and temperature screenings at our office locations,” he said. “All international travel is banned, and we are busy implementing efforts to reduce domestic travel where possible.”
MTN’s main operations across sub-Saharan Africa have been less directly affected by the virus, but the associated affect on the region’s economy and market turmoil have hammered the company’s share price. The stock fell a further 5% during trade on Wednesday, and is near 15-year lows.
Adverse trading conditions may impact MTN’s plans to sell assets and raise as much as R60-billion to reduce debt, Mupita said. The carrier is looking to sell down stakes in telecommunications tower group IHS Holdings and its Lagos-listed Nigerian business, while mulling further disposals.
“We have managed to reduce debt to the lowest in four years, but would like to push that even lower in the medium term,” the CFO said. “To do this, we will have to wait for more favourable market conditions.” — (c) 2020 Bloomberg LP