MTN’s earnings jump, gets offer for Afghanistan business

South African mobile operator MTN Group said on Thursday its first-half earnings surged 46.5% and it had received an approximately R560 million binding offer for its Afghanistan business, nearing an exit of the Middle East.

Without disclosing the buyer, Group Chief Executive Officer Ralph Mupita told journalists on a news call the gross sum of almost R560 million would be paid over a period of time, and proceeds would be around R496 million.

He added the completion of the deal would conclude MTN’s exit from Middle Eastern markets, after selling MTN Yemen and abandoning MTN Syria last year. Its 49% financial investment in Iran cell will continue to be managed within the MTN portfolio.

In 2020, MTN announced an exit from the Middle East to focus on its core African operations as part of its efforts to simplify its structure and reduce exposure to riskier markets.

MTN, which operates in 19 markets, reported headline earnings per share, the main profit measure in South Africa, of 567 cents in the six-months ended June 30, up from 387 cents a year earlier.

Group service revenue increased 14.8% to R92.5 billion, supported by growth of 4.1% in MTN South Africa, 19.9% in MTN Nigeria and 29.3% in MTN Ghana amid higher demand for data services.

Data revenue grew 35.9%, supported by the 14.2% year-on-year growth in active data subscribers and 25.5% increase in data usage. Voice revenue, its biggest service revenue generator, inched up 1.9%, as financially constrained consumers in South Africa substituted voice calls with data calls.

Fintech revenue rose 14%, impacted by the deliberate decision to cut peer-to-peer pricing as well as the introduction of new fintech taxes and levies in some markets, including Ghana.

MTN said it had lowered prices in order to reduce the burden on customers, which also had an impact on transaction value.