By Gugulakhe Lourie
JOHANNESBURG, March 12 (Reuters) - MTN (MTNJ.J: Quote, Profile, Research, Stock Buzz), Africa's biggest mobile operator by subscribers, aims to increase customers by a quarter this year and is eyeing acquisitions as demand in Nigeria and Iran helps it defy a global slowdown.
MTN, which operates mobile phone networks across Africa and the Middle East, on Thursday reported a 33 percent rise in 2008 adjusted headline EPS to 904.4 cents, at the top end of its own forecast, and said it was cautiously optimistic about 2009.
It increased subscribers by 48 percent to 90.7 million -- slightly slower growth than in 2007 -- due to strong growth in Nigeria and Iran and said it expected to add 22.6 million customers by the end of the year.
"I think these subscriber numbers are sustainable for at least two years or more," Chief Executive Phuthuma Nhleko said.
MTN shares gained 1.8 percent to 93.65 rand by 1531 GMT, outpacing a 0.3 percent higher Johannesburg Top 40 index of blue-chip stocks .JTOPI. The stock has lost 28 percent in the past year compared with the Top 40's 40 percent fall.
While the global economic slowdown has hit telecom firms in developed countries, Africa has so far been relatively unscathed by the crisis and consumers are still spending on cell phones while operators seek growth opportunities in new markets.
MTN also said it was buying 17 Musica music stores from South Africa's New Clicks (NCLJ.J: Quote, Profile, Research, Stock Buzz) for an undisclosed amount and would use them to sell MTN products as it expands its retail footprint.
MTN, which has aggressively pursued acquisitions and moved rapidly into challenging markets such as Nigeria, Iran and Afghanistan in recent years, said it may take advantage of lower valuations for telecom assets to make more acquisitions, although it stressed prices may still fall further.
MTN's net debt decreased by 3.2 billion rand to 12.9 billion rand, while its cash balance was at 28.7 billion rand.
"This provides them with a solid balance sheet to be able to pursue depressed assets," Sisa Rafuza, a portfolio manager at Metropolitan Asset Managers said.
While many global firms have scrapped dividends, MTN rewarded its shareholders with a 181 cents per share payout, compared with 136 cents in 2007. Revenue rose 40 percent to 102.5 billion rand.
MTN may face tougher competition from its rival Vodacom in Africa after Vodafone (VOD.L: Quote, Profile, Research, Stock Buzz) takes control of the South African operator in a deal meant to give it the muscle and freedom to expand on the continent.
MTN is eyeing more growth in its Iranian business, which lifted subscribers to 16 million from 6 million a year earlier. By the end of this year, Iran and Nigeria are expected to add a combined 12 million users.
A WiMax licence and spectrum in Iran may help it win customers, and MTN aims to launch wireless Internet services this year.
In Nigeria, Africa's most populous nation and MTN's biggest market, users rose 40 percent to 16.5 million. The company is spending more money to expand its Nigerian infrastructure.
MTN increased South African customers by 16 percent to 17.2 million, but market share was flat at 36 percent.
Headline EPS is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items. ($1=10.158 Rand) (Editing by Erica Billingham) (For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/)