It was a day of two stories for Africa's largest mobile operator. MTN warned on 11 August that its reported half-year earnings would fall, a caution that sent the share down 5.99% to R193.20 and wiped about R22.55 billion off its market value in a single session, taking it to R354.27 billion. The trading statement was triggered by JSE rules requiring a warning once results are set to differ by at least 20% from the prior period. The catch is that the underlying business just had one of its strongest halves in years.
One line did the damage
The pain traces to a single entry: a roughly R3.9 billion impairment, an accounting writedown, on MTN's 49% stake in Iran's Irancell. MTN decided to sell that stake back in 2020, but US sanctions and Iran's exclusion from the global banking system have kept it stuck. That hit, alongside hyperinflation and foreign-exchange losses, plus a tough prepaid market at home and a fintech setback in Nigeria, pushed bottom-line earnings down 20% to 30% and left headline earnings between flat and 10% lower. The Nigeria knock came after regulators suspended its airtime-advance service, cutting second-quarter fintech revenue by about 70%, and the Ghana business, MTN's second largest, has also faced legal action over its fintech arm. A year earlier the group had booked about R11.7 billion in headline earnings and R9.75 billion in after-tax profit, a base the one-off charges now distort.
Strip out the one-offs
On the measure MTN says best reflects trading, adjusted headline earnings per share, the picture flips: profit should climb 18% to 23%, to between R7.75 and R8.08 a share, from R6.57. The group described a resilient performance with strong margin expansion and free cash flow growth. That strength is real on the ground: net income in Nigeria, its biggest market with about 81 million subscribers, surged 71%, while Ghana rose 43% and Uganda 38%.
Full results are due on 24 August, with MTN also reporting progress on its IHS tower deal. The open question is whether the market keeps punishing a strong operating business for a stake it has spent five years trying to give up.
