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MTN Earnings Gain as Nigeria Leads Mobile Growth Across Africa

MTN Earnings Gain as Nigeria Leads Mobile Growth Across Africa

(Bloomberg) -- MTN Group Ltd. first-half earnings rose as Africa’s largest wireless carrier pushed ahead with an asset disposal plan and saw strong profit growth in its biggest market of Nigeria.

  • The Johannesburg-based mobile-phone company said earnings before interest, taxes, depreciation and amortization rose 10%, while sales also gained 10%.
MTN Earnings Gain as Nigeria Leads Mobile Growth Across Africa

Key Insights

  • MTN is now about six months into a plan to raise about 15 billion rand ($1 billion) from disposals to help pay down debt, which increased to 70.1 billion rand in the first half. Even so, the carrier is seeking to add Ethiopia to its 21 markets, with a potential auction of new licenses to take place by 2020.
  • A headache for for MTN is -- as ever -- its biggest market of Nigeria, where the company is still struggling to resolve a $2.2 billion tax claim that’s delayed a plan to sell down a stake in its local unit. Africa’s most populous nation continues to pay its way however, with earnings gaining 16% over the half year.
  • MTN is among carriers suffering an interminable wait for the auction of new spectrum in South Africa. In the meantime, the carrier extended a roaming agreement with struggling rival Cell C Pty Ltd. on Wednesday to cut costs for both groups.

Market Reaction

  • MTN shares have climbed almost 27% this year, narrowing the gap in market value to crosstown rival Vodacom Group Ltd. to just 6 billion rand.

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  • Statement

To contact the reporter on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, John Bowker

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