MTN Group Ltd. said first-half profit declined 11%, missing analysts’ estimates, as sales fell in the company’s largest markets and foreign-exchange movements weighed.
Net income, excluding one-time items, decreased to R11.9 billion in the six months through June, the Johannesburg-based company said in a statement on Wednesday. That compared with an average analyst estimate of R12.2 billion. Sales fell 4.9% to R69.2 billion, with data revenue up 21%.
“A difficult regulatory environment and weak macroeconomic conditions continue to impact the Group’s performance,” Chief Executive Officer Sifiso Dabengwa said. “Results were further impacted by unfavorable exchange rate movements.”
story_article_left1
MTN, which has 231 million subscribers across 22 countries, has been battling strikes over pay and bonuses in its home market of South Africa, where sales have declined because of competition, handset supply-chain difficulties and labor strikes. MTN’s biggest market by subscribers is Nigeria, where revenue fell 9%.
The shares gained 0.2% to 208.70 rand as of 9:37 a.m. in Johannesburg, paring the year’s declines to 5.9%. The stock fell 6% on July 28, the day the company said first-half earnings would be lower. Main competitor Vodacom Group Ltd. is up 12% in 2015.
The company cut its 2015 subscriber growth forecast to 16.75 million customers from 17.5 million estimated in March.
“We expect the balance of the year to remain challenging for MTN Nigeria,” Dabengwa said. “Results were constrained by the weak macroeconomic environment, aggressive competition and operational execution challenges.”
The shares have declined 5.9% this year, valuing the company at 385 billion rand. Main competitor Vodacom Group Ltd. is up 12%.
MTN increased its half-year dividend to 4.80 rand a share from 4.45 rand. The negative impact of foreign-exchange movements was caused mainly by the strengthening of the rand against Africa currencies including the Nigerian naira and Ghanaian cedi, the company said.
- Bloomberg
Just R20 for the first month. Support independent journalism by subscribing to our digital news package.