MTN Earnings Climb by Up to 30% on Foreign Exchange Gain

MTN Group Ltd. (MTN), Africa’s biggest mobile-phone company, said 2013 earnings per share jumped 25 percent to 30 percent, boosted by a foreign exchange gain of about 1.1 billion rand ($99.5 million)

The increase was mainly a result of a currency gain in MTN Mauritius, the Johannesburg-based company said in a statement today. MTN made a foreign exchange loss of about 2.7 billion rand the previous year.

“It is a positive trading statement, ahead of our estimates of a 20 percent increase,” Kate Turner-Smith, a Cape Town-based analyst at BPI Capital Africa, said in a phone interview. “MTN benefits from a weaker rand.”

MTN generated about 31 percent of sales in South Africa during the first half of last year, with the rest coming from operations in other markets including Nigeria. The rand was the worst performing major currency against the dollar in 2013, weakening 19 percent in the period, according to data compiled by Bloomberg.

The foreign currency gain for 2013 “translates to about 60 cents, which would take our headline earnings per share estimate to 14.03 rand per share, the lower limit of the trading statement range,” Turner-Smith said. MTN said earnings per share excluding one-time items rose 1.9 percent to 10.89 rand in 2012, according to a statement last year.

MTN shares fell 1.4 percent to 197.88 rand at the market close in Johannesburg, valuing the company at 371 billion rand. The stock has declined 8.8 percent this year, compared with a 12 percent fall at Vodacom Group Ltd. (VOD), the South Africa market leader.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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