SENS Note - 12 June 2002

M-Cell results for 12 months ended 31 Mar 02

Revenue was 49.1% higher at R12 432m (R8 337.3m), operating profit was 19.8% higher at R2 342m (R1 954.7m), but attributable earnings were 19.7% lower at R572.6m (R713.5m). EPS was 25.8% lower at 35.1cps (47.3cps), and HEPS was down 4.3% to 71.3cps (74.5cps). The successful launch of MTN Nigeria during the year was a major contributor to the increase in revenue. The total number of capable subscribers rose by 36% to 4.77m. Headline EPS was however impacted by the start up losses and increased interest expense relating to the Nigerian investment. The group forecasts that the market in SA will expand to 14m subscribers within the next 5 years, reflecting a more mature market. This will result in slower growth than previously experienced. With increased focus on value and customer retention, MTN SA expects to grow its revenue in line with the overall market, while improving its margins. MTN Nigeria has established itself as the core of M-Cell Africa's strategy. With an estimated market potential of 10m subscribers by 2010, it is expected that the Nigerian operation will become a significant contributor to M-Cell`s revenue and EBITDA in the forthcoming year. However, the Nigerian operation is not expected to earn a profit during the next financial year. While taking into consideration the group's current expansion into Africa, and the related funding requirements, coupled with the existing exchange control limitations, M-Cell will continue to explore further opportunities on the continent in line with its vision of being the leading provider of communication services in Africa. It is forecast that EPS should resume its growth trend in the coming year, assuming a continued strong performance by MTN Nigeria.

Click here for original article