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We take a look at the latest trading update from listed Telecoms operator MTN for the year ending December 2018. The company has been battered and bruised in recent years with issues with Nigerian regulators and one of their biggest markets, Iran constantly facing sanctions which limits MTN's ability to take money out of the country.
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Trading Statement
MTN is currently in the process of finalising its results for the 12 months ended 31 December 2018.
These will be announced on the Stock Exchange News Service of the JSE Limited on or about
Thursday, 7 March 2019.
Following the trading statement published on Monday, 4 February 2019, shareholders are further
advised that MTN expects to report, for the 12-month period ended 31 December 2018, growth in
full year headline earnings per share (“HEPS”) of between 80% and 90% and growth in basic earnings
per share (“EPS”) of between 95% and 100%.
Considering the HEPS of 182 cents and EPS of 246 cents for the prior financial year this translates into a range for HEPS of 328 cents to 346 cents and for EPS of 480 cents to 492 cents. HEPS were impacted by a number of once-off and non-cash items totaling approximately 220 cents per share in the financial year ended 31 December 2018. The adjustments for the year include costs related to the Nigerian regulatory fine, hyperinflation adjustments, net foreign exchange losses and the resolution payment to the Central Bank of Nigeria (“CBN”).
The results for 2018 were also impacted by the stronger rand and weaker currencies in the group’s foreign entities. Post year end and following the resolution of the dispute with the CBN, MTN Nigeria has resumed dividend payments to its shareholders.
Considering the HEPS of 182 cents and EPS of 246 cents for the prior financial year this translates into a range for HEPS of 328 cents to 346 cents and for EPS of 480 cents to 492 cents. HEPS were impacted by a number of once-off and non-cash items totaling approximately 220 cents per share in the financial year ended 31 December 2018. The adjustments for the year include costs related to the Nigerian regulatory fine, hyperinflation adjustments, net foreign exchange losses and the resolution payment to the Central Bank of Nigeria (“CBN”).
The results for 2018 were also impacted by the stronger rand and weaker currencies in the group’s foreign entities. Post year end and following the resolution of the dispute with the CBN, MTN Nigeria has resumed dividend payments to its shareholders.
Was the market happy with the trading statement?
The short answer is absolutely not. The markets were expecting a lot better from MTN. Based on the range provided for their headline earnings per share (HEPS), it places the group on a PE of around 24. Which is extremely high, considering the market average is closer to the 16/17 mark. The screenshot from Sharenet below shows the share price performance of MTN over the last 5 years. It is clear that the company and its share price have been struggling over the last number of years.
The summary below shows the performance of MTN's share price over various time periods:
So its clear MTN shares have not been performing very well and has left investors pretty bruised and battered. And based on the trading statement released we expect MTN's share price to continue struggling for a long while still.
- 1 week:- 1.91%
- 1 month: -2.32%
- Year to date (YTD): -6.16%
- 1 year: -35%
- 3 year: -37.6%
- 5 year: - 57.6%
So its clear MTN shares have not been performing very well and has left investors pretty bruised and battered. And based on the trading statement released we expect MTN's share price to continue struggling for a long while still.