SENS Note - 09 June 2005
MTN final results March 2005
 
MTN Group continued its strong growth trend during the 2005 financial year, achieving an increase of 45% in Adjusted Headline earnings per share (Adjusted Headline EPS) to 366.6c. The group lifted consolidated revenues by 21% year-on-year to R29bn on the strength of a 50% increase in its total mobile subscriber base to 14.3m at 31 March 2005. MTN Group also improved profitability levels, recording earnings before interest, tax, depreciation and amortisation (EBITDA) of R12bn and profit after tax (PAT) of R7.3bn, up 33% and 47%, respectively, compared to last year. The reported Adjusted Headline EPS excludes the beneficial financial impact of the deferred tax asset recognised by MTN Nigeria Communications Ltd (MTN Nigeria). Basic (unadjusted) headline earnings per share are 385c compared to 264.2c for the previous financial year.

The contribution by the international operations to overall group results increased slightly to 39% of revenue, 50% of EBITDA and 44% of Adjusted Headline EPS. As a significant proportion of the group`s revenue and profits is generated outside South Africa, the fluctuation of the reporting currencies of the international operations against the rand continues to impact on the group`s consolidated results. Of primary importance is the Nigerian naira, against which the rand strengthened by 17% on average over the 2005 financial year compared with the average rate for the previous year. Consequently, the strong revenue and earnings growth achieved by MTN Nigeria was somewhat muted in the group financial results when translated into rand. During the year, the rand also appreciated by between 2% and 17% on average against the reporting currencies of the group`s other international operations.

Prospects
The group`s vision is to be the leader in telecommunications in developing markets. To further consolidate its position on the continent and to diversify its investment portfolio, the group will continue to explore value-enhancing international expansion opportunities. Business opportunities complementary to the core mobile telephony business will also be pursued. Assuming that current market conditions prevail, the board is confident that the group will continue to show good subscriber growth and maintain a strong market position in all its operations despite intensifying competition. While a meaningful capital expansion programme in Nigeria and South Africa is planned for the current financial year, this will be fully funded by the operations and is expected to support further subscriber and revenue growth. The group continues to review alternative mechanisms to broaden the Nigerian shareholding in MTN Nigeria. A further announcement will be made in this regard once a firm decision has been reached.

Change in year end
The MTN Group board has decided to align its reporting cycle with its international peers and has approved a change in year end to 31 December. Transitionally, interim results for the six-month period to 30 September 2005 will be reported on, followed by financial results for the nine-month period to 31 December 2005. The group`s reporting cycle will then change, with interim results being published for the six months to 30 June and full-year financial results to 31 December.

Dividend
In light of the group`s strong free cash flow generation, especially by the South African operation coupled with its strong financial position, the board recommended a dividend cover of 5 to 6 times on Adjusted Headline EPS. Accordingly a dividend of 65c per share for the year has been declared.
 
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