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MTN reports $672m profit in 2018, to list shares in Nigeria

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UGO AMADI

TN Group reported a 110 percent growth in profit after tax (PAT) in 2018 driven by strong growth in voice, data and fintech revenue, according to its financial results for the year ended December 31, 2018. The telco grew PAT to R9.6 billion ($672.6 million) in 2018 from R4.6 billion a year earlier. Earnings before interest, tax, depreciation and amortization (EBITDA), which is a measure of a company’s operating performance, grew 2.7 percent to R48.2 billion.

“Key focus areas for 2019 are the launch of our own music streaming and instant messaging applications and extending MTN mobile money from 14 to 18 countries through launches in South Africa, Nigeria, Afghanistan and Sudan,” noted Rob Shuter Group president and CEO, who proudly stated while delivering his presentation on the 2018 financial results that the group has now delivered eight quarters of continued operational improvements.

“We continue to benefit from the demographic dividend in the countries in which we operate and, while the markets remain challenging, we continue to target service revenue growth ahead of inflation,” he added.

MTN, which has faced a couple of regulatory challenges in some of its major markets, including Nigeria, resolved them in the past year. Shuter stated that improving relationships and risk management remains key focus areas for the group, even as it continues in 2019.

With the regulatory issue in Nigeria now resolved, MTN is set to list its shares on the Nigerian Stock Exchange in the first half of the year, subject to regulatory approvals.

“This will be achieved via a listing by introduction and will be followed by a public offer once market conditions are conducive,” MTN Group stated. “Over time, and subject to market conditions, we anticipate that the participation of Nigerians in the ownership of the business will increase from around 20 percent to 35 percent.”

Shuter expects subscribers, voice and data revenue to grow over the next few years, as the company also execute on the large mobile data opportunity.

“We will also extend our BRIGHT strategy to build MTN into a digital operator with a major focus on the fintech, digital, enterprise and wholesale business areas,” Shuter said. “We are confident that MTN is well placed to continue to deliver on our medium-term guidance and the board remains committed to targeting growth of 10 percent to 20 percent in the dividend going forward.”

Shuter also introduced a new $20 smartphone made by China Mobile for MTN, which he said would hit the market at $22. The “smart feature” phone is made with keypads that would ordinarily be found on a feature phone. He hopes the price and design would encourage more late adopters of smartphones to start using a data enabled device.

The MTN Group CEO also revealed that the telco will be ready to launch a payment service bank in Nigeria in Q2, having already applied for the licence following a new regime that began last year.

Last year, the company completed a review of its portfolio, to ensure an appropriate strategic and operational fit. Following this, MTN plans to realise at least R15 billion in asset realisations over the next three years excluding any proceeds from IHS, which the company plans to use to reduce holding company debt. As a result of the review, MTN is also selling its 53 percent shareholding in Mascom Wireless Botswana (Pty) Limited, which has been identified as non-core in light of the lack of control position and inability therefore to execute its BRIGHT strategy, MTN has accepted an offer from Econet Wireless (Pty) Limited to acquire Mascom. The purchase consideration for MTN’s shareholding is $300 million. The transaction is subject to various approvals and is anticipated to be concluded by June 2019, the company stated.

The MTN board has declared a gross final dividend of 325 cents per share, bringing the total dividend for the year to 500 cents per share.The shares of MTN jumped 9.77 percent in early trading on Thursday as the live webcast of the company’s financial results went on.

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