MTN Group Ltd. (MTN), Africa’s largest mobile-phone operator, reported full-year earnings that missed analysts’ estimates, weighed down by foreign-exchange losses and increased spending on networks. Adjusted earnings per share climbed to 10.89 rand from 10.69 rand a year earlier, Johannesburg-based MTN said today in a statement. That missed the 11.67 rand median estimate of 12 analysts surveyed by Bloomberg. Exchange-rate moves, including the decline of the Syrian pound, Iranian rial and Sudanese pound against the rand curbed adjusted earnings per share by 1.79 rand, according to MTN, which operates in 22 African and Middle Eastern markets. Capital spending rose 70 percent to 30.1 billion rand ($3.32 billion) as MTN upgraded networks to handle more data traffic as consumers access the Internet from mobile devices. This year and last will be “peak� times for capital spending, Chief Executive Officer Sifiso Dabengwa said at a presentation to reporters and analysts in Johannesburg today. MTN has “done well in adding networks in South Africa and Nigeria,� Dabengwa said. “It’s very important, in order to compete effectively, to improve network coverage.� The shares were little changed at 179.51 rand as of 12:13 p.m. in Johannesburg, for a market value of 338 billion rand. Money Out “With the likes of Iran, Sudan and Syria there is some pressure in that the true earnings value is affected when you come to take your money out,� said Bruce Main, a fund manager at Ivy Asset Management Ltd., which owns MTN stock. “Greater geographical diversity has meant greater risk in this case, but it is important to be there for growth.� The spending on networks will “come off� over the next few years when that investment starts to attract market share, Main said. Subscriber numbers rose 15 percent to 189.3 million last year, MTN said. Airtime sales at the South African business increased 4.8 percent to 21.1 billion rand as the unit sold 6.7 million prepaid phones and 1.3 million billed devices in the year. MTN is “quite comfortable� that risks posed by a lawsuit brought against it by Turkcell Hetism AS have been minimized, Dabengwa said. Turkey’s biggest mobile-phone operator sued MTN for $4.2 billion in damages for alleged bribery last March after losing out on an Iranian mobile license. MTN paid 300 million rand in related costs in 2012, Chief Financial Officer Nazir Patel said today. “We expect that the U.S. court will decide its motion to dismiss such proceedings by the end of June 2013,� Dabengwa said. To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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