MTN approves $375 million share buyback after profit rise

Mobile operator MTN Group approved a $375 million share buyback program on Monday, following a 21.3% increase in adjusted half-year profit. CEO Ralph Mupita announced the buyback would commence immediately, with MTN shares jumping 4.61% to 201 rand upon news. As Africa's largest telecom company, MTN boasts over 317 million customers across 19 markets.

Adjusted headline earnings per share (HEPS) climbed to 793 cents in the six months ending June 30 from 654 cents a year earlier, though reported HEPS dipped 5.8% due to a 3.9 billion rand non-cash impairment on its 49% stake in Iran's Irancell. This impairment stemmed from Iran's hyperinflation and the rial's sharp depreciation.

Foreign exchange losses in South Sudan also impacted earnings. The impairment is part of MTN's plan to exit Iran, its sole Middle Eastern operation, hampered by U.S. sanctions since May 2018, which prevent MTN from repatriating about 880 million rand in trapped dividends. CEO Mupita noted that if sanctions were lifted, MTN would proceed with its Middle East exit strategy.

Outside Iran, Nigeria, Ghana, and Uganda drove a 17.5% rise in service revenue to 115.3 billion rand. MTN's performance was bolstered by strong subscriber additions, growth in digital and fintech services, and a 24.4% rise in core earnings to 56 billion rand. EBITDA margin expanded by 3.1 percentage points to 47.1%. MTN's remaining challenges to its tower deal with IHS Towers are primarily regulatory, with conditional approval from Nigeria's competition regulator requiring a potential stake reduction of up to 30% over time at market prices.