MTN has issued a trading statement alerting shareholders to an expected earnings decrease for the six months ended 30 June 2021.
The group expects to report a decrease in earnings per share (EPS) of between 75% and 85% (or 506 cents to 573 cents). Considering the EPS of 674 cents for the corresponding six-month period ended 30 June 2020, this translates into a range of 101 cents to 169 cents for the six-month period ended 30 June 2021.
According to MTN, the EPS includes impairment losses totaling approximately 75 cents (2020: 99 cents) that relate mainly to MTN Yemen, largely non-cash losses from the deconsolidation of subsidiary MTN Syria of approximately 262 cents (2020: 0 cents) and a gain on the fair value uplift on consolidation of the group’s equity accounted investment in aYo of 96 cents (2020: 341 cents gain from disposal of ATC Uganda and ATC Ghana tower joint ventures).
It is anticipating a decrease in headline earnings per share (HEPS) of between 5% and 15% (or 22 cents to 65 cents). Considering the HEPS of 430 cents for the corresponding six-month period in 2020, this translates into a range of 366 cents to 409 cents for the six-month period.
HEPS were negatively impacted by a number of non-operational and once-off items totaling approximately 118 cents per share (2020: positive impact on HEPS of 46 cents) for the six-month period ended 30 June 2021. These include items (93 cents) largely relating to foreign exchange losses, and noteworthy donations related to Covid-19 support for the Africa Centre for Disease Control and Prevention (CDC) and the Coalition Against COVID (CACOVID) task force in Nigeria (25 cents).
In terms of cash upstreaming, MTN has made progress in strengthening its financial position, maintaining a healthy liquidity position and faster de-leveraging of the holding company (Holdco) balance sheet. This has been supported by upstreaming of approximately R9,3-illion in cash from its operating companies (Opcos), including R4-billion from MTN Nigeria, in the six months to 30 June 2021. Post the period end, MTN has received a further R0,7-billion in cash from Nigeria to date.