MTN Group has approved a 6 billion rand ($375 million) share buyback programme following a strong first-half financial performance, with adjusted profit rising by 21.3 per cent.
The South African telecommunications giant said its board approved the buyback as the company reported stronger cash generation and improved operating performance across several of its key African markets.
MTN Chief Executive Officer, Ralph Mupita, said the share repurchase programme would commence on Monday. MTN shares rose 4.61 per cent to 201 rand during trading on the Johannesburg Stock Exchange.
The company, which serves more than 317 million customers across 19 markets, reported adjusted Headline Earnings Per Share (HEPS) of 793 cents for the six months ended June 30, compared with 654 cents recorded during the same period last year.
However, reported HEPS declined by 5.8 per cent, largely due to a 3.9 billion rand non-cash impairment on MTN’s 49 per cent stake in Irancell.
The impairment reflected the impact of hyperinflation in Iran and the sharp depreciation of the country’s currency, the rial. Foreign exchange losses in South Sudan also weighed on the company’s overall earnings.
MTN is seeking to exit Iran as part of its broader strategy to withdraw from the Middle East. However, the process has been complicated by US sanctions imposed on Iran since 2018.
Mupita said the sanctions had also prevented MTN from repatriating about 880 million rand in dividends trapped in Iran.
“With the sanctions in place, we can’t put any money in and we can’t take any money out,” Mupita said, adding that MTN would continue with its Middle East exit strategy if the sanctions situation changed.
Outside Iran, MTN’s major markets, particularly Nigeria, Ghana and Uganda, contributed significantly to the group’s performance.
Service revenue increased by 17.5 per cent to 115.3 billion rand, while revenue growth in South Africa stood at 1.5 per cent.
The company attributed the improvement to strong subscriber growth as well as increased demand for its digital and fintech services.
MTN’s core earnings rose 24.4 per cent to 56 billion rand, while its EBITDA margin expanded by 3.1 percentage points to 47.1 per cent.
The telecommunications group also provided an update on its proposed tower transaction with IHS Towers, saying the remaining hurdles were largely regulatory.
MTN said it had received conditional approval from Nigeria’s competition regulator, which requires the company to reduce its stake in the Nigerian tower business by up to 30 per cent over time at prevailing market prices.
The latest results and the share buyback underline MTN’s improving financial position as the group continues to focus on strengthening its core African operations, expanding digital and fintech services and restructuring its international portfolio.
