MTN Rewards Shareholders As Earnings Soar

The company overcame several regulatory headwinds in 2018, the most material of which was the Central Bank Central Bank of Nigeria dispute on historical dividend repatriations.

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MTN
MTN

MTN, the South African-based Africa and Middle East mobile phone operator, on Thursday published its full-year results for the year to end-December, declaring a final dividend of 325 cents a share.

The company, which is valued at more than R145 billion on the JSE, reported a 85.2% rise in headline earnings per share (HEPS) to 337 cents a share in the period. Adjusting for once-off items HEPS would have been 565 cents per share.

HEPS is South Africa’s main profit gauge.

MTN is firing on all cylinders.

During the reporting period, MTN increased its subscriber base by 16 million to 233 million customers across 21 markets in Africa and the Middle East.

The number of active data users rose by 10 million to 79 million and the active mobile money subscriber base rose to 27 million. This strong commercial momentum drove a 10,7% constant currency increase in service revenue to R125,4 billion.

“The service revenue growth rate achieved is ahead of both prior year and our guidance and – more importantly – is above the average rate of inflation in our markets, which means we are delivering real growth in service revenue,” said Rob Shuter, MTN’s group CEO.

Rob Shuter, MTN Group CEO
Rob Shuter, MTN Group CEO

Group Ebitda rose more than 15% and reported headline earnings per share.

The group stabilised its gearing, bringing the holding company leverage down to 2,3 times in December 2018 from 2,9 times in June 2018 and within the target range of 2,0 to 2,5 times. The group’s overall gearing moderated to 1,3x.

“We have made good progress to improve the holding company leverage bringing it within the medium-term guidance range we set out. Proceeds we receive from the asset realization program will support efforts to further reduce debt and de-lever the holding company balance sheet.” said group CFO Ralph Mupita.

“We believe the holding company leverage is appropriate, and we can well manage the debt and deliver on our 500 cents progressive dividend policy in the future.”

The company overcame several regulatory headwinds in 2018, the most material of which was the Central Bank Central Bank of Nigeria dispute on historical dividend repatriations.

This was resolved and MTN announced in December 2018 that they had agreed to implement a notional reversal of the 2008 private placement and consequently made a resolution payment of $53 million.

The group said it is committed to further enhancing its risk management and stakeholder management processes.

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