MTN, whose shares have been battered by regulatory troubles across
its portfolio of 21 markets, has raised its medium-term revenue targets
and announced plans to sell at least R15bn worth of assets to reduce
debt.
That helped boost the mobile operator’s stock, which jumped as much
as 8.9% in early trade on Thursday to R82.85, largely reversing the
share’s declines in recent trading days.
Excelsia Capital analyst Mark Narramore said
there had been plenty of
short positions in MTN’s shares, which meant a “short squeeze” was
possible.
A short squeeze is a sharp increase in the price of a stock
when short-sellers — investors who had bet against the share — cover
their positions.
MTN CEO Rob Shuter said on Thursday morning that after the group’s
revenues accelerated in the year to end-December, it decided to raise
its guidance for service-revenue growth from high single digits to
double-digit growth.
The mobile operator was also targeting a return-on-equity ratio of above 20%, from 11.5% in 2018, he said.
Moreover, MTN planned asset sales of at least R15bn over the next
three years, excluding any proceeds it may get from its R23bn investment
in tower company IHS.
As part of those plans, Shuter said MTN would sell its 53% stake in
Mascom Wireless Botswana to Econet for $300m (R4.3bn) as it did not have
control over that asset.
The group would look to offload nonmobile assets such as its investments in tower companies and e-commerce ventures.
MTN said on Thursday its subscriber base rose by 16-million customers
to 233-million, as service revenues grew 10.7%, from 7.2% growth in
2017.
The group’s reported headline earnings per share (HEPS) increased to 337c from 182c in 2017.
- BusinessDay SA
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