Investors who are looking for stocks with the potential for capital appreciation and dividend income, that of MTN Nigeria Communications Plc remains one of such stocks.
Recall that MTNN on May 16, 2019 listed by introduction its 20.35 billion (20,354,513,050) ordinary shares at N90 per share. Since its listing on the Premium Board of the Nigerian Stock Exchange (NSE), the stock has continued to attract “buy” sentiments.
As of Monday July 29, the stock price of MTNN stood at N127, representing an increase of about 41.1percent since its listing on the NSE. This feat comes on the heels of the NSE All Share Index (ASI) recording negative year-to-date (YTD) returns to -11.07percent.
The company’s market capitalisation was N2.626trillion as at June 30. As at July 29, it lowered to N2.585trillion.
This record decline in the company’s market capitalisation is occasioned by share price decline and signals re-entry opportunity for value hunters at the Nigerian Stock Exchange. MTNN had reached a record high of N159.30 and a low of N99.
Last weekend, the company decided to create new wealth for its shareholders as the directors declared interim dividend amounting to N60billion for the first-half (H1) period ended June 30, 2019. The company had in the year ended December 31, 2018 paid N73billion dividend.
The Telco’s half-year (H1) 2019 result released last Friday July 26 at the Nigerian Stock Exchange (NSE) shows the interim dividend translates to N2.95kobo per share.
The register of shareholders will be closed from August 9 to 13, 2019. The qualification date for the interim dividend is August 8.
In the review H1’ 2019, MTNN sustained a solid performance, delivering double- digit growth in service revenue, underpinned by growth in voice and data revenue.
MTNN audited result shows service revenue increased by 12.12percent to N566.946billion from N505.667billion in the preceding half- year (H1) period in 2018. MTNN added 3.3million customers to its network, increasing its subscriber base to 61.5million.
“We will continue to progress in the second half of the year making improvements to our network experience, subscriber growth,and enhance operational efficiency”, said Ferdi Moolman, CEO, MTN Nigeria Communications Plc.
He said: “We expect lower data pricing and our acceleration of the 4G network expansion to bolster the acquisition of customers and data traffic volumes in the second half”.
MTN Nigeria in January 2019 adopted IFRS 16 accounting standard in line with global best practices. The Company saw data subscribers increase in the period (H1’19) under review by 2.1million to 20.7million.
Operating pro f i t of N190.403billion in H1’ 19 against N136.501billion in H1’18 represents 39.49percent increase. Profit before tax (PBT) of N141.797billion in H1’19 against N108.354billion in H1’18 shows increase of 30.86percent ; while the company’s profit for the review period at N98.930billion implies an increase of 34.79percent, from N73.395billion in H1’18.
“We made significant network investments to improve network quality and expand our 4G coverage. Our recent work to revamp our data prices and accelerate our 4G network has put us in a strong competitive position to offer more value to our customers, supporting data and voice revenue growth which will ultimately strengthen our business,” said Moolman.
“We are pleased with obtaining a super- agent licence from the Central Bank of Nigeria (CBN), which will enable us to build an agent network and accelerate the growth of our fintech business,” he added.
MTN recently made changes to its Board following the retirement of six pioneer non-executive directors on the expiration of their tenure and in compliance with applicable corporate governance code.
MTNN Chief Financial Officer ( CFO), Adekunle Awobodu has also indicated his intention to resign from the position of the CFO of the company in this second-half (H2) of 2019 for family related reasons, Moolman revealed following the released H1’19 results. MTN N recorded 11.4percent increase in Voice revenue; while Data revenue was up by 31.7percent in H1’19.
Fintech revenue increased by 21.2percent; Digital revenue decreased by 64.5percent ; capital expenses (capex) increased by 63.8percent to N105.8billion; Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 40 percent to N304.9billion; while EBITDA margin increased by 10.7percentage points to 53.8percent . MTNN increased its Mobile Subscriber base by 3.3million to 61.5million in H1’2019.
Amid this impressive result, the company’s overriding priority for the remaining part of the year is to focus on its BRIGHT strategy to build a sustainable business and create value for customers.
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