South Africa’s MTN this morning reported a strong set of financial results for the first half of the year but remained tight-lipped on its ongoing merger talks with India’s Bharti. According to a Bloomberg report, net income at the Johannesburg-based firm rose 22 percent to ZAR7.63 billion (US$970 million) in the six months ended 30 June from ZAR6.24 billion a year earlier, while sales increased 24 percent to ZAR57.3 billion. The total number of MTN subscribers increased 14 percent to 103 million driven by a strong performance at its Nigerian subsidiary, which saw subscribers rise 19 percent to 27.3 million. However, subscribers in its home market of South Africa grew by just 62,000 over the same period. “The disappointing increase in subscribers [in South Africa] was due to a combination of factors including challenges on the network and supporting systems, slowing growth, pressure on consumer spend, and competitor activity in the first half of the year,” MTN said in its statement. MTN has operations in 21 countries, including Nigeria, Ghana, Ivory Coast, Afghanistan and Iran.
Meanwhile, on the subject of the Bharti merger, MTN’s CEO Phuthuma Nhleko said in the statement that “no decision or agreement to acquire any shares or global depository receipts or implement the potential transaction” has been made by the boards of either MTN or Bharti. According to the original merger plans, Bharti will acquire a 49 percent shareholding in MTN, while MTN and its shareholders would acquire an approximate 36 percent stake in Bharti, of which 25 percent would be held by MTN with the remainder held directly by its shareholders. However, Bloomberg reports that shareholders of about 20 percent of MTN have said they do not support the deal at the price indicated by Bharti for the MTN shares. For an agreement to succeed, shareholders with a minimum of 75 percent of MTN need to support the merger. Separate reports earlier this week claimed that both parties have secured bank funding to support the deal.