MTN backs midterm targets with $374 million buyback as core cash holds up

MTN Group will buy back R6 billion ($374.3 million) worth of its own shares and stick to its medium-term financial targets, betting that strong growth across major African markets will offset currency pain and steep write-downs in the Middle East.

The Johannesburg-based telecommunications giant, led by Chief Executive Officer Ralph Mupita, is leaning into its core African footprint as trouble in non-core units weighs on the bottom line. Profit attributable to shareholders dropped 25 percent to R7.41 billion ($462.3 million) in the six months ended June 30, dragged down by an impairment at its Iranian joint venture, Irancell, alongside steep foreign-exchange losses in South Sudan.

Despite that headline drag, the underlying business showed clear signs of strength. Adjusted headline earnings—the company’s preferred measure of core operating health—climbed 21 percent, lifted by double-digit gains in key West and East African markets. While the home market of South Africa cooled and Iran remained a headache, operations in Ghana, Uganda, and Nigeria delivered solid returns. Nigeria alone accounts for roughly 81 million subscribers and remains the company’s single largest cash generator.

MTN targets 20 percent plus return on capital

MTN told investors on Monday that it expects group service revenue to grow in the high teens over the next three to five years, while targeting a return on capital between 20 percent and the low 30 percent range. Management expects revenue to pick up speed in the second half of the year as airtime lending stabilizes in Nigeria and prepaid demand rebounds in South Africa. To back up that outlook, the company launched its share-repurchase program on Monday, with executives pledging to keep buying as long as the transactions deliver clear value to investors.

Mupita credited the first-half numbers to steady demand, tight cost controls, and focused spending across voice, data, and mobile-money networks. Earnings before interest, taxes, depreciation, and amortization (EBITDA), excluding one-off items, rose 20 percent to R56 billion ($3.5 billion), or 24.4 percent on a constant-currency basis. That helped lift the group’s EBITDA margin to 47.1 percent from 42.7 percent a year earlier.

MTN free cash flow jumps 33 percent

Cash generation also improved across the board. Operating free cash flow rose 27.5 percent to R25.1 billion ($1.57 billion), while total free cash flow reached R11.1 billion ($692.86 million). Equity free cash flow, which dictates dividend payouts and share buybacks, jumped 32.7 percent to R7 billion ($436.91 million). The group closed June with net debt at 0.3 times EBITDA and R39.1 billion ($2.44 billion) in reserve funds.

Operationally, MTN continued to carve out its fintech arm into an independent business under its Ambition 2030 plan. The group completed the structural split of its fintech unit in Ghana and is waiting on final regulatory sign-offs to do the same in Nigeria and Uganda. It also broadened payment capabilities through a partnership with Ant International.

Elsewhere, the carrier is pushing ahead with a deal to buy out minority investors in tower operator IHS, while directing fresh capital into artificial intelligence and regional data centers. In the Middle East, MTN finalized an exit settlement with the Syrian government over its former local venture, clearing the way to receive $43.9 million once final legal paperwork is signed.