More key investment signals are still emerging from the recently released bumper results of the leading telecom giant in Africa, the MTN Group Limited.
Already, the group has started a critical review of happenstances in economies where it operates in terms of capital expenditure (capex) and cost of doing business vis-à-vis marginal earnings.
Otherwise, the telecom is beginning to look more at economies that are self-funding amongst the 22 countries in which it operates.
However, analysts say, no matter the cost of business operations, it is very unlikely that Nigerian market will be among economies MTN Group will intend to exit considering the volume of earnings proceeds from Nigeria is adding to the deep pocket of the multinational conglomerate.
In a statement issued in South Africa, the Chief Executive Officer, Rob Shuter, says it is reviewing the 22 countries with the aim of exiting economies with difficult ease of doing business and at the same time, identifying opportunities for expansion and possibly “some shifts in the current portfolio”.
Currently, MTN’s biggest markets are Nigeria, Iran and South Africa, but the Johannesburg-based company also has licenses in small or war-torn countries such as South Sudan and Syria.
Reporting his first full-year results since becoming CEO, Shuter, said the focus for 2018 was to slightly lower capital expenditure while setting a longer-term sales-growth target of a percentage in the upper-single-digits, driven by Nigeria.
He also sees dividend growth of as much as 20 percent a year, after cutting the payout for 2018 to 5 rand a share from 7 rand last year.
MTN shares jumped 3.6 per cent, the most in almost two weeks, to 127.04 rand as in Johannesburg. That values the company at 239 billion rand ($20.1 billion).
MTN’s new targets come as it returned to full-year profit, enabling the company to move beyond a tumultuous period that began with a $5.2 billion regulatory fine in Nigeria in October 2015. According to Peter Takaendesa, portfolio manager at Mergence Investment Managers Ltd, “The cut in dividend was largely expected for 2018 — some were even expecting as little as 4 rand”.
