SENS Note - 15 July 2010 |
MTN - business update and future prospects |
At the annual general meeting to be held, Chief executive and president, Phuthuma Nhleko will make the following comments regarding the group's performance for the first five months of 2010 in comparison with the similar period for 2009: *The majority of the markets in which MTN operates have continued to show strong subscriber growth to the end of May 2010 despite increasing competition. Group subscribers increased nearly 10% for the 5 months to the end of May 2010. This positive subscriber growth translated to sound revenue growth and profitability in the various local currencies. As the group's non-SA operations contribute in excess of 70% of MTN`s revenue, the continuing strength of the South African currency has again had a negative impact on the translation of these earnings resulting in a marginal reduction in rand reported revenue and EBITDA relative to the same period last year. Had rates been the same as the prior year, revenue and EBITDA would have been meaningfully higher.
The activities of MTN have for many years been guided by its vision to be a leader in telecommunications in emerging markets supported by the following key strategic pillars:
MTN has delivered on this strategy through the numerous organic and acquisitive opportunities it has invested in to date. However, the board of MTN ("the board") recognises that as the sector continues to mature there are a limited number of value accretive consolidation opportunities left within emerging market telecoms. The group has also invested heavily in infrastructure across all its operations over the past few years. Therefore, the level of capital expenditure investments in infrastructure is anticipated to be lower as emerging markets enter a phase of higher penetration. As a consequence of the sector evolution and MTN's anticipated future cash generation, going forward, the board is able to more easily balance its growth aspirations with that of ensuring improved short term returns to shareholders. Accordingly, while MTN will continue to evaluate and consider value accretive opportunities, the Group will increase its focus on the following issues:
MTN is well positioned in its markets to compete within a changing competitive and regulatory landscape with a strong focus on cost management as pressure on the revenue line increases. Given the above, the board is investigating options to meaningfully improve cash returns to MTN shareholders and envisage the declaration of a top up dividend at the interim stage as part of a sustainable strategy towards improving the annual dividend payout ratio to MTN shareholders. The information in this business update has not been reviewed or reported on by the group's external auditors. MTN is currently in a closed period and will be announcing its interim results on the 19 August 2010. |
Click here for original article |