Ferdi Moolman: The CEO who painted Lagos Bourse “Y’hello”

Ferdi Moolman, Chief Executive Officer (CEO) of Nigeria’s biggest non-oil foreign direct investment, MTN Nigeria.
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One of the most talked about personality in Nigeria and even across the globe in the past one week is Ferdi Moolman, Chief Executive Officer (CEO) of Nigeria’s biggest non-oil foreign direct investment, MTN Nigeria.

Moolman rose to the position of CEO on December 1, 2015 after the telecommunication giant made several appointments to review its operating structure with a view to strengthening operational oversight, leadership, governance and regulatory compliance across its 22 country operations in Africa and the Middle East.

Until his appointment as CEO, Moolman was the Chief Operating Officer (COO) at MTN Iran cell but was later brought into the Nigerian unit of the firm as the Chief Financial Officer.

Since clinching the position of CEO, Moolman alongside his team, has taken the company to new heights.

 

His appointment as CEO came after the company was slammed a $5.2 billion fine by the Telecommunication’s regulatory body, the Nigerian Communications Commission (NCC) for failing to meet a deadline to disconnect unregistered users from its network. The fine was however reduced to about $1billion after several talks and negotiation between both parties.

Under his watch, the company became the second most capitalized—after Dangote cement—on the floor of the Nigerian stock exchange after successfully moving from being a private company to become a publicly listed company.

The company also joined the league of several other companies to receive the Payment Service Banking Licence (PSB) of the Central Bank of Nigeria.  The licence will enable the Telcom giant to facilitate transactions in remittance services, micro-savings and withdrawal services in a technology-driven environment to further deepen financial inclusion in the country and get the 36.5 percent or 35 million of the populace that are currently unbanked, according to data from Efina index.

Currently, the South Africa-based telecom company offers mobile money services in 14 of the 22 markets where it operates and hopes to do the same when the PSB finally commences.

MTN has continued to show strong resilience by rolling out several products that have made it dominated the Nigerian oligopolistic telecommunication market ahead of its two main competitors, Globacom and Airtel.

BusinessDay in this article takes a critical look at MTN Nigeria to analyse the growth of this firm under the leadership of Moolman.

MTN Listing on the NSE

MTN Group agreed to list the Nigerian unit shares as part of a June 2016 agreement to pay $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.

The telecommunications firm had earlier plan to raise about $500 million in an Initial Public Offering (IPO) from the sale of shares of its Nigerian business, according to Bloomberg sources. This primary listing by the firm was supposed to commence in the first quarter of 2018.

The Initial public offering by the firm eventually came to a halt after it was accused by the CBN of illegally repatriating about $8.1 billion as dividend to its shareholders. MTN had denied any wrong doing.

While still resolving the issues of a tussle between the firm and the apex bank, Nigeria’s Attorney General, Abubakar Malami, slammed the South African telcoms firm with a $2 billion back taxes on its capital equipment imported into the country.

MTN also denied any wrongdoing and dragged both the CBN and the Attorney to court. It however settled the matter of illegal capital repatriation with a $53 million out of court payment while that of the Attorney General is still ongoing in court.

These combined issues halted the firms’ plan to become the first to break the four-year IPO drought on the Nigerian Stock Exchange. Meanwhile, MTN has completed the IPO of its Ghanaian unit.

Fast forward to April 2019, MTN Nigeria announced its conversion from a private company to a public company. The conversion to a public company is a legal requirement and a preparatory process for its listing in the NSE.

While still in the preparatory stage, Moolman stated that the listing on NSE would enable new class of investors (particularly Nigerians) to explore investment opportunities in the company.

“MTN’s intended listing on the NSE would create a new telecom asset class for investors and provide a wider group of Nigerians with a chance to participate in the MTN investment opportunity.

“It was a re-affirmation of the company’s long-term commitment to expanding investment opportunities for Nigerians, in addition to providing everyday services to them.”

MTN Nigeria finally crossed the milestone on Thursday last week, listing about 20.35 billion of its shares.

On the first day of trading, MTN share price gained some N9.00 to close at N99 per share, having traded 5.5 million shares worth N545.59 million in 15 deals, as investors scramble for its shares.

With a market cap of N2.437 trillion at the close of trading yesterday, MTN Nigeria is now the second biggest company listed on the NSE, overtaking the likes of Nestle, Nigeria Breweries and GTB. Its share price closed N119.75

Analysts bet that the listing by introduction of the firm would not only reverse the bearish trend that has been experienced in the market, but would trigger the listing of other telecommunications firms.

Nigeria is one of MTN Group’s largest markets in the world. Therefore, the listing on the NSE is part of the company’s strategy to spur growth and further improve its market dominance. The CEO stated further:

“Nigeria is one of the largest markets within MTN’s portfolio and central to the company’s growth strategy. The upcoming listing is a key milestone for the MTN group and is part of its commitment to localisation in the markets in which it operates.”

MTN Nigeria’s revenue crosses N1 trillion

In 2018, MTN Nigeria became the first ever firm to cross the one trillion naira mark, in terms of revenue.

This was despite the $53 million out of court payment it made to the Central bank to settle a fine on illegal repatriation of capital dividend.

Revenue of the firm rose by 17.1 percent year on year from N887 billion in 2017 to N1.03 trillion in 2018.

This increase in revenue was on the back of an increase in revenue from data subscribers as the firm added nearly six million new subscribers in the period.

Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) was a total of N453.1bn, which indicates 43.6 percent margins expansion in EBITDA margins without CBN’s resolution amount.

In terms of data subscribers, MTN Nigeria has been maintaining a distant top position among other telecoms operators. In 2018, MTN Nigeria added 4.5 million active data customers during the year, delivering data revenue growth of 39.3 percent and expanding to 18.7 million. So far in 2019, the company has maintained its lead by controlling 41% of the total market share.

The company rolled out 519 2G sites, 2342 3G sites, and 1338 4G sites last year.

Great possibility abounds for MTN Nigeria as the group in its annual report  has also forecast double-digit growth in Nigeria in the medium term.

“we have revised our medium-term (three to five years) guidance on service revenue growth from upper-single-digit in constant currency terms to double-digit growth, driven by double-digit growth from MTN Nigeria and mid-single-digit growth from MTN South Africa,” the group said.

MICHAEL ANI & DIPO OLADEHINDE

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