Lunar Capital Weekly Roundup
| Index / Fund / Rate | Start of Year | Last week | This Week | % change YTD |
|---|---|---|---|---|
| JSE ALSI | 73 723 | 69 519 | 70731 | -4.06% |
| NASDAQ Composite | 15 833 | 12 658 | 13047 | -17.60% |
| S&P 500 | 4 797 | 4 145 | 4280 | -10.77% |
| Prime Lending Rate | 7.25% | 9.00% | 9.00% | 24.14% |
| Lunar BCI WW Flexible Fund | 165.68 | 150.04 | 148.81 | -10.18% |
| USD/ZAR | 15.96 | 16.77 | 16.23 | 1.69% |
| EUR/ZAR | 17.95 | 17.07 | 16.64 | -7.30% |
| Brent Crude | 77.86 | 94.38 | 97.1 | 24.71% |
Source: iress
Why Numbers Matter: In Review
A month ago we held our Lunar Capital client event: Why Numbers Matter. We’d like to share two of the short clips with you from the event.
The story of how Lunar Capital started
And the stories of some of the people who’ve invested with us
If you would like to talk to us about our products and what we can offer you, contact us via email at: [email protected] or phone Sabir at: +27 83 305 7860
Company and Market News
Last week, MTN released their interim results for 2022. Overall the results were quite good. Total revenue for the interim increased by 10.3% compared to last year. And profit after tax for the interim increased by 148.89%. The increase in revenue was largely attributable to the increase in data sales. Data sales were up 33.1%. Of the total revenue, data sales account for 34%. The stock price for MTN jump 6.46% last week on the positive news.
MTN is a telecom service provider that operates primarily in Africa. The three locations which account for the most revenue are South Africa (25.6% of revenue), Nigeria (36.4% of revenue), and Ghana (10.2% of revenue.) One of the key metrics used when valuing a telecom provider is Average Revenue per User per a month (ARPU). ARPU for MTN in South Africa was $6.01, Nigeria: $5.01, and Ghana: $3.60. In South Africa, a year ago the ARPU was $6.91. The decrease in ARPU in South Africa is as a result of data prices decreasing.
Some of the risks that MTN faces are high levels of inflation and hyperinflation in some of the countries they operate in. This hurts their bottom line figures which are reported in ZAR. Telecom providers also have high fixed costs. This can negatively impact their profit in the long term if they are not able to grow their customer base.
MTN’s main competitor is Vodacom. However Vodacom’s operation is primarily focused in South Africa. For Vodacom’s most recent quarter, South Africa accounted for 77.8% of total revenue.
Below is a table comparing key metrics of MTN with Vodacom.
| Company | Market Cap @ 12 Aug 2022 (ZAR’bn) | PE Ratio @ 12 Aug 2022 | Net Margin | ROE | ARPU in South Africa (ZAR) |
|---|---|---|---|---|---|
| MTN | 287.37 | 13.68 | 12.18% | 20.14% | 94 |
| Vodacom | 239.97 | 13.51 | 17.26% | 20.75% | 89 |
Disclosure: MTN and Vodacom are held in the Lunar BCI Worldwide Flexible Fund.
Read our full Disclosure statement: https://lunarcapital.co.za/disclosures/
Our Privacy Notice: https://lunarcapital.co.za/privacy-policy/
The Lunar BCI Worldwide Flexible Fund Fact Sheet together with our Disclaimers can be read here.
