MTN Says First-Half Earnings Rose on Foreign Exchange Gain
The mobile-phone service provider made a currency gain of of about 1 billion rand ($101 million) during the six months through June, compared with a 1.5 billion rand loss in the previous year, the company said in a statement today.
The increase came as a result of lower net finance costs at some of its subsidiaries, the Johannesburg-based company said. MTN declined to comment further in an e-mailed statement. The shares rose as much as 1.7 percent to 188.46 rand, the highest in more than two weeks, and traded 0.8 percent higher as of 1:35 p.m. in Johannesburg.
“It’s likely to be a subsidiary with debt, such as Nigeria,” Bpi Capital analyst Kate Turner-Smith said in a phone interview. “Translating Nigeria’s finance costs into South African rand at current rates could result in the foreign exchange gain.”
The Nigerian naira has appreciated 18 percent against the South African currency over the past 12 months, according to data compiled by Bloomberg. Nigeria accounted for about 28 percent of MTN’s 2012 revenue. The company will report first-half financial results on Aug. 14, it said.
Net finance costs were 4.16 billion rand in the year through December, an increase of 2.58 billion rand on the previous year, MTN said in a statement in March. At the time, the company said the Syrian pound had declined more than 60 percent over the year and resulted in a loss of 1.51 billion rand related to the dividend payable.
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