UPDATE 2-South Africa's MTN sticks to medium-term forecast as earnings rise

© Reuters.

* Q1 EBITDA up 15.6%
* Maintains medium-term forecast
* Cuts 2020 capex
* South Africa market disappoints

(Adds details, shares and graph)
By Nqobile Dludla
JOHANNESBURG, May 14 (Reuters) - MTN Group MTNJ.J , South
Africa's largest mobile operator by subscribers stuck to its
medium-term forecast on Thursday, despite the coronvirus
pandemic, as it posted higher core earnings for the first
quarter.
However, the mobile operator cut its capital expenditure
guidance for 2020 to between 21 billion rand ($1.13 billion) and
22 billion rand, from 28.3 billion rand when it reported 2019
results in March.
Its shares had weakened 0.95% to 49.14 rand at 1149 GMT.
MTN's Chief Financial Officer Ralph Mupita said that while
this financial year would be challenging, the company would
maintain its 3-5 years medium-term guidance for now.
"We anticipate that disruptions in the supply chain and
challenges in rolling out coverage under lockdown rules,
combined with our emphasis on liquidity, will impact on our
capex programme for the year," MTN said.
MTN's rival Vodacom Group VODJ.J on Monday postponed
issuing its medium-term forecasts due to the uncertain economic
outlook as the coronavirus pandemic unfolds. MTN said its liquidity headroom, or cash and committed
credit lines, at its holding company stood at about 45.2 billion
rand, comprising 19.3 billion rand in cash and 25.8 billion rand
in undrawn credit facilities.
MTN said the virus impact had shifted revenue trends from
March, with data revenue increasing as governments order people
to stay at home, roaming declining due to a drop in
international travel and voice revenue coming under pressure.
Fintech revenue has also come under pressure due to the
restriction of movement and discounted prices.
At its three largest markets, data traffic in MTN Nigeria
was up 32% at the end of April versus February, up 56% in South
Africa and up 39% in Ghana.
Group service revenue for the three months ended March 31
rose by 11.1% and earnings before interest, tax, depreciation
and amortisation (EBITDA) jumped by 15.6%, the mobile operator
said.
Lockdown restrictions across the group's markets were only
implemented from the last week of March.
The group recorded voice, data and fintech revenue growth of
6.3%, 26.4% and 26.0% respectively, while digital revenue has
returned to growth, increasing by 15.6% as consumers access more
digital services at home, it said.
MTN Nigeria and MTN Ghana generated strong double-digit
service revenue growth, buoyed by data, voice and financial
services.
In South Africa performance was largely negatively impacted
by lower revenue from the Cell C roaming agreement and loss of
roaming agreement with rival Telkom TKGJ.J .



($1 = 18.5664 rand)

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