MTN to quit the Middle East

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MTN Group willexit its operations in the Middle East to become an Africa-only-focused telecommunications operator.

“MTN has resolved to simplify its portfolio and focus on its pan-African strategy and will therefore be exiting its Middle Eastern assets in an orderly manner over the medium term,” the group said in a statement alongside its interim financial results on Thursday.

The group is already in “advanced discussions” to sell its 75% stake in its Syrian subsidiary, CEO Rob Shuter said in a call with journalists. It is negotiating with TeleInvest, the 25% owner of the Syrian business, about the sale.

“MTN Syria contributed 0.7% to MTN’s reported earnings before interest, tax, depreciation and amortisation (Ebitda) in the first half of 2020,” the group said. “The net assets attributable to MTN Syria in the MTN Group accounts have been written down to the estimated recoverable amount of R1.4-billion. The foreign currency translation loss of R4.8-billion as at 30 June 2020, which has accumulated over time, will be released to the income statement on conclusion of the transaction. This will negatively impact earnings per share, but will have no material impact on headline earnings per share, cash flow and the balance sheet.”

Shuter said the initial focus will be on exiting its operations in Syria, Yemen and Afghanistan. However, it also plans to divest of its 49% of its stake in MTN Irancell in time.

“As part of the review of our portfolio, we believe the group is best served to focus on its pan-African strategy and to simplify its portfolio by exiting the Middle East region in an orderly manner over the medium term. The Middle East assets contributed less than 4% to group earnings before interest, tax, depreciation and amortisation in the first half of 2020,” it said. —(c) 2020 NewsCentral Media

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