MTN and their prospects

MTN and their prospects, after the trading statement yesterday, Paul wrote a piece that I copy pasted. Then there was an interesting trading update from the dudes over at Santam, I thought that it might be interesting to tie in what Buffett thinks of the industry. And how badly have Old Mutual done over the last ten years, what sort of returns would you have got if you had just waited on them for ten years. India and China, check out the work force average age gap and your jaw will drop. And then the Mooi River Index seems to be generating a lot of excitement.



Paul wrote an interesting piece to a journalist last night, about MTN and their prospects. I am going to do a copy paste job here goes: "Well, last year (to December 2009) MTN made around R8 per share. The consensus view, as you may know, is that they will make around R10 per share for the year to December 2010, around R11.50 in 2011 and R13 in 2012.



All of these rinky-dink analyst models project healthy subscriber growth, steady margins and growing data sales. The perkier ones assume slowing capital expenditure and better free cash flow generation. We are at the perma-bull end of the swimming pool, so we assume higher subscriber growth, higher ARPUs and more data sales. Much of this is speculative, and based on the idea that smarter devices and new applications equals happy customers, paying them more every month.



As for the SA operation, we are fairly sanguine about the outcome of the interconnect reduction process. It is not a positive development, but our view that handset initiatives and other freebies will get cut, packages will be juggled, and overall margins will stay much the same. Voila, thanks for playing Icasa! Something to note is that the strong Rand is not helping profits from outside SA.



As you know, the board is considering paying out an interim dividend. It will be interesting to see what they come up with here - many in the market are excited about MTN moving to becoming a higher yielding stock. Remember too that earnings are one thing, and the share price is another. If global risk appetite rises, MTN will be one of the first stocks to go up, even if these numbers are indifferent."