• Tuesday, March 05, 2024
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BusinessDay

Handset supply disruptions drag MTN H1 profit down 10 pct

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Africa’s biggest mobile phone company MTN Group 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.