MTN approves $375 million share buyback after profit rise

MTN Group, Africa's largest telecom operator, has approved a $375 million share buyback program after reporting a significant rise in half-year adjusted profit. CEO Ralph Mupita announced that the buyback program would commence on the same day. The company's shares saw a 4.61% increase in early trading, reaching 201 rand.

MTN's adjusted headline earnings per share (HEPS) increased to 793 cents in the six months ending June 30, up from 654 cents the previous year. However, reported HEPS fell by 5.8% due to a 3.9 billion rand non-cash impairment on its 49% stake in Irancell, which is attributed to Iran's hyperinflation and the rial's sharp depreciation. Foreign exchange losses in South Sudan also impacted earnings.

The company's decision to exit Iran stems from U.S. sanctions since May 2018, which have prevented the repatriation of about 880 million rand in trapped dividends. Mupita stated that if the sanctions were lifted, MTN would continue with its Middle East exit strategy. Nonetheless, MTN's main markets, Nigeria, Ghana, and Uganda, contributed to a 17.5% rise in service revenue to 115.3 billion rand. South Africa's growth, on the other hand, was only 1.5%.

MTN's core earnings surged 24.4% to 56 billion rand, and its EBITDA margin improved by 3.1 percentage points to 47.1%. The company mentioned that regulatory hurdles to its tower deal with IHS Towers are the only remaining challenges. They have received conditional approval from Nigeria's competition regulator, which requires the company to reduce its stake in the Nigerian business by up to 30% over time at market prices.