MTN Group, Africa’s largest mobile operator by subscribers, resumed its annual dividend payout on Wednesday, after announcing a higher payout than previous guidance, as the divestment plan made progress and profits rose.
MTN suspended dividends in March last year in order to focus on reducing debt and due to uncertainties around cash upstreaming from Nigeria, the timing of proceeds from its asset realisation program, and the impact of COVID.
At the time, it said it would announce a new dividend policy for fiscal 2022 in March and estimated paying at least 260 cents per share in dividends for fiscal 2021.
According to Group Chief Executive Ralph Mupita, the board has considered cash balances, solvency and liquidity, as well as the investment profile we have for the year ahead and has declared a dividend of 300 cents per share, 40 cents higher than our minimum dividend.
The company also announced a new dividend policy, which guides the market annually on a dividend amount, based on its capital allocation priorities and market conditions, Mupita added.
Under its new policy, MTN anticipates paying an ordinary final dividend of at least 330 cents per share in the financial year 2022.
MTN, which has 273 million subscribers in 19 countries in Africa and the Middle East, also upgraded its medium-term growth guidance, now anticipating mid-teens percentage growth in constant currency terms, up from low-to-mid teens.
It is expected that MTN Nigeria, the company’s largest revenue generator, will grow service revenues by 20 per cent from previous targets in the midteens.
As a result of continued demand for data, digital, and financial services, the company’s group service revenue grew by 18.3% to 171.8 billion rand ($11 billion) in the year ended Dec. 31.
In its home market of South Africa, it increased headline earnings per share (HEPS) by 31.8% to 987 cents.
Due to cash received from its operating companies as well as proceeds from divestment, the company’s net debt fell to 30.1 billion rand from 43.3 billion rand.
