Forte’s Profit Drops by 34%, MTN Embraces Eurobond

  • Forte’s Profit Drops by 34%, MTN Embraces Eurobond

The profit of Forte Oil Plc for the period ended September 30, 2016 (at the group level) dropped by 34 per cent year-on-year.

The firm’s profit as of September 30, 2015 was N4.284bn while for the current year, the profit stood at N2.796bn, according to the results released to the Nigerian Stock Exchange on Thursday.

At the company level, the profit rose marginally from NN3.62bn to N3.637bn.

MTN Group Limited, on the other hand, returned to the Eurobond market for the first time since 2014 as the Africa’s biggest wireless carrier by sales seeks funds for investment.

The mobile-phone company is offering a five-year note at a yield ranging from 5.375 per cent to 5.5 per cent, according to a person familiar with the matter.

MTN is also marketing a 10-year bond at about 6.5 per cent, the person said, more than 80 basis points over the yield of its outstanding bond due in 2024, Bloomberg reported.

“The initial guidance is quite generous, well over the existing bond, but there’s a lot of economic and regulatory uncertainty in both South Africa and Nigeria,” Richard Segal, a senior analyst at Manulife Asset Management in London, said by phone.

MTN’s bond sale comes after South Africa raised $3bn in its biggest Eurobond offering, taking advantage of demand for emerging-market debt. The company is seeking funds for capital expenditure after the company reported its first-ever half-year loss, partly caused by an agreement to settle a N330bn ($1bn) fine with Nigerian regulators.

The subscriber base of 233 million didn’t grow during the six months through June, while MTN is struggling to repatriate 15.4 billion rand ($1.1bn) tied up in its Iran unit.

MTN total debt was 22.48 billion rand at the end of 2015, with a debt-to-equity ratio of 14.8 per cent.

“The company has quite comfortable debt coverage ratios,” Alexandre Dray, a credit analyst at Gimme Credit in Tel Aviv, said in e-mailed comments, adding that, “MTN is thus ready to increase its cost of debt.” He estimated that the carrier could raise as much as $1bn.


About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]; Tel: +2347065163489.

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