Cellular network operator MTN Group is paying a 41c per share dividend after a strong year that saw it achieve a 77% increase in adjusted headline earnings per share.
Revenue for the year to 31 March 2004 rose by 23% from R19.41 billion to R23.87 billion. CEO Phuthuma Nhleko says non-South African operations accounted for 36% of revenue for the period.
They also accounted for half of the group`s earnings before interest, tax, depreciation and amortisation, which totalled R8.98 billion (2003: R6.22 billion). Adjusted headline earnings per share rose from 143.3c to 253.1c, of which 46% was contributed by international operations.
Group profit after tax increased by 94% from R2.22 billion to R4.31 billion, while net profit rose by 91% from R1.93 billion to R3.7 billion.
SA, where MTN has a market share of 38%, still provides MTN with the bulk of its subscribers. South African subscribers number 6.27 million at the year-end, compared with 4.72 million previously. Average revenue per user (ARPU) in SA slipped from R206 to R203.
Nigerian subscribers rose from 1.04 million to 1.97 million, with ARPU of $51 versus $57 previously. The group also has 581 000 subscribers in Cameroon, 495 000 in Uganda, 146 000 in Rwanda and 85 000 in Swaziland.
The group has invested heavily in Nigeria, with 67% of the R5.05 billion total capital expenditure being accounted for by Nigeria.
Nhleko says MTN Nigeria continues to experience strong demand for its services, requiring a controlled sign-up of new subscribers to match the available network capacity.
"Accelerated network roll-out continues in a challenging operating environment, with the number of base stations increasing from 478 at 31 March 2003 to 839 a year later. The number of operational switches has also increased to 16 from 11. During the year under review, a limited recourse $345 million medium-term, project-finance facility was raised by MTN Nigeria to fund its aggressive network roll-out."
He says MTN will continue to explore value-enhancing international expansion opportunities. "While such expansion is expected to provide further growth as well as diversification of earnings and risk, the group will become more susceptible to foreign exchange rate movements.
"Assuming that current market conditions prevail, the board is confident that the South African operation will maintain its strong free cash flow generation for the group, which will fund further expansion, while the international operations are expected to maintain positive subscriber and revenue growth, underpinned by the significant ongoing capital investment into network roll-out, particularly in Nigeria."
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