Africa’s largest mobile network operator, MTN Group, is returning cash to shareholders after a strong operational rebound.
The telecoms giant announced that its board has approved a R6 billion $375 Million share buyback programme that will start immediately, after reporting a sharp rise in underlying earnings for the six months to June 30, underpinned by its powerhouse markets of Nigeria, Ghana and Uganda.
Chief Executive Ralph Mupita confirmed the buyback will kick off on Monday, a move that was cheered by the market. By 10:05 GMT, MTN shares were up 4.61% to R201 on the Johannesburg Stock Exchange.
MTN, which now serves more than 317 million customers across 19 markets, is in the midst of a turn-around driven by a recovery in Nigeria and sustained fintech and data growth.
The group reported a complex set of results, showing a clear divergence between its underlying performance and reported headline numbers impacted by non-cash items.
Adjusted headline earnings per share [HEPS], the company’s preferred measure of underlying profit which strips out one off items, rose 21.3% to 793 cents from 654 cents a year earlier. On a reported basis, however, HEPS fell 5.8%.
MTN attributed the decline to two major exceptional drags. The largest was a R3.9 billion non cash impairment against its 49% stake in Iran cell, its joint venture in Iran.
The company said the write down reflects the continued impact of hyper-inflation accounting and the steep depreciation of the Iranian rail. Foreign exchange losses in South Sudan, where currency volatility has intensified, also weighed on the bottom line.
R6bn Buyback Signals Cash Confidence
The decision to launch a R6 billion buyback is a strong signal of balance sheet strength and cash generation, despite the headline earnings pressure.
‘’The programme reflects confidence in the group’s medium term prospects and its ability to fund growth while improving shareholder returns. The buyback will be executed on the open market.’’
Mr. Mupita
The group’s core operating performance supports that confidence. Service revenue grew 17.5% to R115.3 billion, while group EBITDA [earnings before interest, tax, depreciation and amortisation] rose 24.4% to R56 billion.
The EBITDA margin, a key measure of profitability, widened by 3.1 percentage points to 47.1%, showing MTN is extracting more profit from every rand of revenue as it benefits from scale in data and fintech.
Nigeria, Ghana and Uganda Lead Growth
Outside of Iran, MTN’s portfolio delivered broad based growth, led by its largest market. Nigeria, which accounts for the biggest share of MTN’s revenue and subscribers, was the main growth engine alongside Ghana and Uganda.
The group credited strong subscriber additions, double digit data traffic growth, and accelerating adoption of its mobile money and digital services. South Africa, its home market and second largest operation, showed more muted growth, with service revenue up just 1.5%, reflecting a highly saturated and competitive environment.
Overall, MTN said growth was supported by three structural drivers that continue to shape African telecoms: rapid growth in data consumption, expansion of fintech services including MoMo, and sustained subscriber growth as mobile penetration deepens.
The results again highlighted MTN’s long running effort to exit the Middle East, a strategy first announced in 2020 to focus on its core African operations. Iran is its last remaining market in the region, but the exit has proven difficult.
Mr. Mupita told journalists that U.S. sanctions re-imposed in May 2018 remain the key obstacle.
“With the sanctions in place, we can’t put any money in and we can’t take any money out. But if the situation did change in a way where there was a removal of sanctions we would continue with executing our Middle East exit strategy.”
Mr. Mupita
The sanctions have not only trapped the investment itself but also about R880 million in dividends that MTN has been unable to repatriate from Iran, he added. The R3.9 billion impairments in Iran cell is a non-cash accounting adjustment and does not impact operational cash flow, but it underscores the economic challenges of operating in a hyperinflationary environment with a rapidly depreciating currency.
Tower Deal Nears Final Hurdle
MTN also provided an update on its strategic tower transaction with IHS Towers, a deal that is central to its asset realisation programme and efforts to de-leverage. The company said the remaining hurdles are largely regulatory. It has received conditional approval from Nigeria’s Federal Competition and Consumer Protection Commission [FCCPC] for the transaction.
The condition, MTN disclosed, requires it to reduce its stake in its Nigerian business over time by up to 30% at market-related prices. This is part of broader local ownership requirements being enforced by regulators in Nigeria.
The tower deal, which involves the sale and leaseback of tower assets, is expected to release significant capital and reduce capital expenditure requirements.
The second half of the year, MTN will be focused on sustaining the momentum in Nigeria, where recent tariff adjustments and currency stability have helped restore profitability, and accelerating fintech monetization across its footprint.
Beyond the strengthened balance sheet, improving margins, and a R6 billion buyback now underway, the group is positioning itself to balance growth investment with shareholder returns, even as it navigates geopolitical risks in its remaining non-core markets.
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