JOHANNESBURG – South Africa’s MTN Group stuck to its medium-term forecast on Thursday, unlike some other companies, as it posted higher core earnings for the first quarter of 2020.
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.
MTN’s Chief Financial Officer Ralph Mupita said that while this financial year will be challenging, the company is maintaining its 3-5 years medium-term guidance for now.
Mupita said MTN would update capital markets of any change in August when it is due to release its first half results.
“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 on Monday postponed issuing its medium-term forecasts due to the uncertain economic outlook as the coronavirus pandemic unfolds.
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 in a statement.
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%.
($1 = 18.5664 rand)