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MTN group restores dividend, hints at higher payout for 2022

MTN partners NIDCOM to offer 5,000 Ukraine returnees humanitarian aid

Africa’s largest mobile operator MTN has restored its dividend for the year to end-December, and it also alerted shareholders they should expect a growth in 2022 dividends on the back of aggressive cost-cutting drive and growing demand for both data and digital services.

The group said on Wednesday that the Covid-19 pandemic had proved beneficial for cashless payments, with MTN’s service revenue growing 18.3% to R171.8bn to end-December, while headline earnings rose 32% to R17.78bn.

Data revenue expanded by 36.5%, due to a 53.3% increase in data usage.

MTN said that the higher demand for online work, education, social interaction and entertainment was initially triggered by the effects of the pandemic, but was sustained in 2021.

“In a challenging macroeconomic environment across our markets, we also experienced what we see as structurally higher demand for data services and accelerating transaction values in our fintech businesses,” CEO Ralph Mupita said in the results.

The group declared a 300c final dividend, from none previously, representing about a R5.65bn payout. The mobile operator said shareholders should expect a minimum of 330c for 2022.

Read also: Adia Sowho: The new face of MTN’s tech makeover

MTN said its has now had 15 successive quarters of operating improvements, and is on track for saving R5bn in expenses compared with 2020, through, for example, digitalising work processes.

Group net debt fell 38.6% to R30.5bn, driven by an improved operational cash position and debt repayments.

MTN’s subscribers grew by 2.9-million to 272.4-million, but when excluding Nigeria, where new SIM registrations rules weighed, subscribers grew by 11-million.

MTN shares surged last week breaching R200 for the first time since mid-2015, driven by oil prices that have shot up due to the ongoing Russia-Ukraine conflict.

The stock has rallied by a massive 173.79% over the past 12 months, giving it a market value of about R375bn.

Competitors Vodacom and Telkom were up 1.75% and 2.23% respectively.

Given MTN’s presence in Nigeria — its largest market — the group’s prospects have been helped in part by rising oil prices.

Brent Crude is up about 80% over the past year as economic activity picked up after the devastation caused by Covid-19.

That has been further boosted by Russia, one of the world’s largest producers, invading Ukraine.