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MTN Full-Year Profit Gains on More Subscribers, Weaker Rand

A technician tests an electrical system outside the headquarters of MTN Group Ltd. in Johannesburg. Photographer: Nadine Hutton/Bloomberg
A technician tests an electrical system outside the headquarters of MTN Group Ltd. in Johannesburg. Photographer: Nadine Hutton/Bloomberg

March 5 (Bloomberg) -- MTN Group Ltd., Africa’s largest wireless operator, said full-year profit increased 27 percent, exceeding estimates, after the South African rand weakened and subscriber numbers rose across its 22 markets.

Headline earnings per share, which exclude one-time items, were 13.86 rand in 2013, the Johannesburg-based company said in a statement today. That beat the 13.4 rand median estimate by 16 analysts in a Bloomberg survey. Sales advanced 12 percent to 136.5 billion rand ($12.7 billion), helped by the rand’s 18 percent decline against the U.S. dollar, the company said. Revenue growth on a constant currency basis was 3.1 percent.

Total subscribers increased 9.8 percent to 207.8 million, supported by 20 percent growth in Nigeria, its biggest market, and further growth in smaller African markets such as Ghana and Ivory Coast. South African customer numbers declined after weak consumer spending and tough competition hampered the business in Africa’s largest economy.

“While the South African business delivered disappointing results, the executive team is focused on helping this business deliver an improved overall performance in the year ahead,” the company said in the statement. “Value-accretive M&A opportunities will continue to be explored in line with our strategy.”

MTN shares gained as much as 2.7 percent to 204.69 rand, the highest on an intraday basis since Jan. 29, and closed 0.1 percent higher in Johannesburg. The stock has declined 8.1 percent this year, compared with a 8.6 percent drop for main competitor Vodacom Group Ltd.

Regulator Pressure

South African wireless companies are looking at Internet access across Africa as consumers increasingly use more profitable data-enabled smartphones and domestic voice service revenue declines. MTN is in talks with fixed-line specialist Telkom SA SOC Ltd. about an infrastructure sharing arrangement for the two companies’ mobile units, two people familiar with the matter said in December.

The company cut jobs in South Africa last year as revenue declined 6.1 percent following an accounting charge relating to handset sales and lower voice revenue.

“The cost structures of the business will continue to be reviewed in 2014,” MTN said in the statement.

MTN has been under pressure from regulators in Nigeria, where it was fined last month for poor service, while the company is seeking legal action in South Africa over plans to halve mobile termination rates, the amount it can charge smaller competitors to use its network.

To contact the reporter on this story: Christopher Spillane in Johannesburg at

To contact the editor responsible for this story: Kenneth Wong at

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