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MTN's shares slumped on Monday, after Africa's largest mobile operator flagged pressure on its profits in SA and cut its guidance, largely due to a hefty spend as it looks to ensure its network can survive the ravages of load shedding.
Strong demand for fintech services and data, as well as its ongoing network rollout, helped lift group earnings before interest, taxation, depreciation and amortisation (ebitda or core profit) 14% in its year to end-December. This was driven largely by a strong performance in Nigeria, with MTN upping its dividend by 10% to R3.30.
However, on Monday it revised its targeted core profit margin guidance for SA down to 37% to 39%, from 39% to 42% previously, driven by higher-than-expected power costs, increased hubs and switches costs as a result of load shedding, higher network security and resilience costs as well as a reassessment management fee agreement with the group.
