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More Africa NewsMTN Group Adds 29 Million Subscribers Despite a Challenging 2020

March 10, 2021by myles0
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MTN added 29 million new subscribers in 2020, to reach a total of 280 million across 21 markets. The group also reported a 52% increase in adjusted headline earnings per share, a four percentage point increase in return on equity to 17% and a more than doubling in operating cashflow to R28,3 billion.

“We continued to perform favourably against our medium-term targets,” says MTN President and CEO, Ralph Mupita. “In constant currency terms, service revenue grew 11,9% to R170 billion and EBITDA increased by 13,4%, maintaining our strong operating leverage. The Group’s EBITDA margin improved by 0,9pp to 42,7%, benefiting from the execution of our expense efficiency programme.”

The solid results were supported by growth in MTN’s larger operations as well as a broad-based improvement across all regions. As well as managing the risks of COVID-19, the telco is reportedly alive to the opportunities presented by the pandemic – particularly the accelerated need for digitalisation evidenced in the greater adoption and usage of MTN services.

In 2020, MTN added 19 million data users and almost 12 million MoMo users, to reach totals of over 114 million and 46 million respectively. The Group’s networks remained well-invested, with CAPEX of R28,6 billion in 2020 and headroom to accommodate growth of more than 110% in data traffic in the year.

In the near-term, MTN is focused on de-leveraging the holding company and it reduced net debt by R12 billion, to R43 billion. The leverage ratio for the year, however, remained flat at 2,2x as cash upstreaming from Nigeria remained challenged.

MTN concluded R4,3 billion of realisations of its asset realisation programme (ARP) and remains focused on completing some of its larger transactions, which did not proceed in the year due to challenging market conditions.

In this regard, MTN suspended the final dividend for 2020 due its near-term focus on faster de-leveraging of its holding company as well as three conditions that negatively impacted this objective. These related to uncertainties around cash upstreaming from Nigeria, the timing of ARP proceeds and COVID-19 impacts.

In light of these material uncertainties, the Board has also suspended the dividend policy and anticipates communicating a revised medium-term dividend policy when we announce our 2021 results in March 2022,” says Ralph.

During this transition, the Board anticipates paying a total ordinary dividend of at least 260 cents per share for the 2021 financial year. Ralph adds, “on assessment of the progress of cash upstreaming from Nigeria, ARP delivery and COVID-19 impacts, the Board will consider returning further cash to shareholders in the form of special dividends or share repurchases after the release of 2021 results”.

Source: IT News Africa

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