| SENS Note - 29 March 2007 |
| MTN final results December 06 |
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The group changed its financial year-end to 31 December, in line with its operational cycle and international peer group. Consequently, the group's prior year's audited results ended December 2005 cover a 9-month period. MTN's revenue increased by 49% to R52 billion when compared to the prior 12-month period to 31 December 2005 and earnings before interest, tax, depreciation and amortisation increased 53% to R22 billion. Adjusted profit after tax increased to R12 billion compared to R6.7 billion for the nine months to December 2005. Basic headline earnings per share rose to 606.5c for the period, 69% above the 359.8c for the nine months ended 31 December 2005. Net finance costs increased by R1.1 billion when compared to the nine months to 31 December 2005, which primarily relates to financing for the acquisition of Investcom. The group incurred total foreign exchange losses of R700 million for the current year. This included recognition of the fair value and foreign exchange adjustments related to the Nigeria put option of R270 million, R100 million of losses on the importation of mobile handsets, R71 million in respect of Guinea Conakry due to the sharp devaluation of the currency during the six months and other charges on foreign currency transactions. Functional currency gains of R452 million were included in finance income for the year. The group's tax charge has increased by R1.2 billion compared to the nine months to 31 December 2005 due to the higher profit levels as well as additional tax charges of R233 million relating to the former Investcom operations. Dividend In light of the group's strong free cash flow generation coupled with its strong financial position, a dividend of 90cps (65cps) has been declared. Prospects The ability to execute MTN`s vision to be the leading operator in emerging markets has been enhanced by the group's increased footprint and scale. The focus for 2007 includes driving regional synergies, taking advantage of opportunities within the value chain and improving operational efficiency through the group's least-cost operator strategy. In addition, MTN will continue to focus on rolling out networks and pursuing strategic expansion opportunities to diversify earnings. The group will also focus on implementing mobile money/payment solutions in key markets to facilitate the transfer of funds in underserviced markets. Assuming the continuation of current market conditions, the board expects the group to continue showing healthy subscriber growth and maintain its strong market position in key operations. MTN Nigeria’s pioneer status ends on 1 April 2007 and 2007 will also be the first year in which profits will be taxed. This and the initial dilution impact of the Investcom acquisition will result in earnings consolidation in 2007. |
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