MTN Group’s headline earnings per share (Heps) will rise by as much as 50% in the year ended 31 December 2019, it said in a trading statement issued after markets closed in Johannesburg on Tuesday.

On a like-for-like basis (using IAS 17 accounting standards for both the 2018 and 2019 financial years), they will rise by as much as 75%, it said.

MTN adopted the new accounting standard on leases, IFRS 16, with effect from 1 January 2019 and, as permitted by the standard, comparative numbers have not been restated and remain on the previous accounting treatment of operating leases in accordance with IAS 17, the group explained.

The adoption of IFRS 16 has resulted in a 13% reduction in the reported earnings numbers, arising primarily from the net effects of lower operating lease costs, higher finance costs and higher depreciation charges.

Heps will rise by between 30% and 50% using IFRS 16 compared to the previous IAS 17 results, while on a like-for-like basis, they will climb by between 55% and 75%. Earnings per share on a like-for-like basis will rise by 15% and 25%.

Non-operational items

“Heps were negatively impacted by non-operational items in the financial year ended 31 December 2019 totalling approximately R1.28/share, on a reported IFRS 16 basis (2018: R2.15/share on an IAS 17 basis),” it said.

The non-operational items for the year include costs related to interest of the Nigerian regulatory fine, hyperinflation adjustments, net foreign exchange losses, impairment on Iran receivables and the impact of divestments made during the year.