Johannesburg : MTN, Africa's largest mobile operator, posted a 21 per cent rise in profit and paid a mid-year dividend for the first time, in line with a new strategy that no longer emphasises growth by acquisitions.
Although built on aggressive takeovers, MTN has said it will now concentrate on paying out more to shareholders because it sees fewer potential targets in emerging market telecoms.
The company also lifted yesterday its forecast for new subscribers this year by nearly 6 per cent, helped by strong growth in core markets such as Nigeria.
MTN, the largest company with a primary listing in Johannesburg, said it would pay an interim dividend of 151 cents per share as it aims for a payout ratio of 40 per cent of full-year earnings.
Shareholders
"This interim dividend is a step change in the company's policy around dividends," said David Lerche, a telecoms analyst at Johannesburg-based Avior Research.
"It shows they want to distribute more cash to their shareholders," he said.
The stock rose more than 2 per cent soon after the results. As of 0955 GMT, shares were up 1.9 per cent at 119.70 rand (Dh60), outperforming a 0.6 per cent rise in Johannesburg's Top-40 index.
While MTN has operations in 21 countries, most of its revenue comes from South Africa, Ghana, Nigeria and Iran. Analysts say it still needs to bulk up in other markets, especially because of increased competition from India's Bharti Airtel.
Bharti, which acquired the African assets of Kuwait's Zain this year, has said it will invest at least $1.1 billion on its sub-Saharan business.
MTN has failed to complete four acquisitions in the last three years.
Its attempt to acquire the Algerian unit of Egypt's Orascom Telecom was thwarted in June by Algeria's government, which wanted the company for itself.
Total subscribers rose 11.4 percent in the first half to 129.2 million amid double-digit growth in Nigeria and Iran.
