MTN to Repurchase $375 Million in Shares Amid Profit Surge: Boosting I

MTN to Repurchase $375 Million in Shares Amid Profit Surge

MTN Group, Africa's largest mobile operator, has announced a share buyback program worth $375 million as it reported a 21.3% rise in half-year adjusted profit and strong cash generation.

The company's board approved the 6 billion rand share buyback program, which will begin on Monday. At 1005 GMT, MTN shares were up 4.61% at 201 rand.

Profit Surge Drives Share Buyback

MTN's adjusted headline earnings per share (HEPS) rose to 793 cents in the six months ended June 30 from 654 cents a year earlier. The company's core earnings rose 24.4% to 56 billion rand, while the EBITDA margin widened 3.1 percentage points to 47.1%.

The profit surge was driven by strong subscriber additions and growth in digital and fintech services, MTN said. Outside Iran, MTN's biggest market, Nigeria, along with Ghana and Uganda, helped lift service revenue 17.5% to 115.3 billion rand. Growth in South Africa was 1.5%.

Exit Strategy Complicated by US Sanctions

MTN is seeking to exit Iran, its last remaining operation in the Middle East, due to US sanctions. The company has been unable to repatriate about 880 million rand in trapped dividends since May 2018. CEO Ralph Mupita said, "With the sanctions in place, we can't put any money in and we can't take any money out."

MTN has received conditional approval from Nigeria's competition regulator for its tower deal with IHS Towers, but the remaining hurdles are largely regulatory. The company is required to reduce its stake in the Nigerian business by up to 30% over time at market prices.

Strong Cash Generation Supports Share Buyback

MTN's strong cash generation has supported the share buyback program, CEO Ralph Mupita said. The company's cash and cash equivalents stood at 103.3 billion rand as of June 30. MTN's share buyback program is a vote of confidence in the company's financial health and future prospects.

MTN's share buyback program is a significant development in the company's financial strategy. The company's ability to generate strong cash flows and invest in its business will be closely watched by investors and analysts. As MTN continues to execute its exit strategy from the Middle East, the company's focus on digital and fintech services will be crucial to its future growth and profitability.

Source: JOY