MTN to Buy Back $375 Million of Shares as It Reaffirms Guidance

MTN Group Ltd. said it will buy back 6 billion rand ($375 million) of shares and reaffirmed its guidance on revenue growth and capital metrics for the next three to five years, even as earnings by Africa’s biggest mobile-network operator fell mainly because of writedowns at its Iranian joint venture.

Profit attributable to shareholders dropped 25% to 7.41 billion rand in the six months ended June 30 due to an impairment of its investment in Irancell and because of foreign-exchange losses in South Sudan, the Johannesburg-based company said in a statement on Monday.

Adjusted headline earnings, which MTN considers a better reflection of its operating performance, climbed 21%.

While MTN’s business in Iran has taken a hit and South Africa has slowed, profit at the company’s units in Nigeria, its biggest market with about 81 million subscribers, Ghana and Uganda are surging.

The carrier said it sees group service revenue growth of at least the high teens and return on capital employed of 20%-plus to low-30% over the medium term.

While group service-revenue growth moderated in the first half, the company sees it accelerating in the next six months as airtime lending in Nigeria normalizes, and as its prepaid business in South Africa returns to growth.

MTN’s share-buyback plan opens today and will continue for as long as it “remains value-accretive” to shareholders.