MTN Group has reported a 10.3
percent fall in half-year profit on Wednesday, hit by handset supply
disruptions in its mainstay South African market following a seven-week
long strike.
MTN, which operates in several African countries, including Nigeria,
said diluted headline earnings per share (EPS) were 654 cents in the six
months to the end of June compared with 727 cents a year earlier.
Headline EPS is the main profit measure in South Africa and it strips out certain one-off items.
Sales fell 4.9 percent to 69.2 billion rand ($5.43 billion) in the
period, hit by unfavourable currency movements and a poor performance in
Nigeria, where a sharp slowdown in the economy weighed on consumer
spending.
About 2,000 entry-level workers downed tools at MTN’s South African
operations in May, demanding higher pay and disrupting the supply new
mobile phones.
Sales were boosted by a more than 20 percent growth in higher margin data sales, the company said.
MTN and rival Vodacom are struggling to grow revenue from voice calls
at home and abroad, having slashed tariffs to defend market share.
In response, both firms are building high-speed networks to meet
strong demand for data as customers increasingly use their smartphones
and tablets to browse the internet, stream videos and download
applications.
South African data consumption is forecast to rise by around 50
percent in five years, according to a recent report by Cisco Systems.
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