TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Load shedding returns, and may last until Thursday

      16 August 2022

      Jo’burg to issue RFP for 500MW of electricity ‘within weeks’

      16 August 2022

      MTN hires outgoing Icasa CEO Willington Ngwepe into top role

      16 August 2022

      Rain in embarrassing climbdown over Telkom statement

      16 August 2022

      Coal miner Seriti plans R12-billion Mpumalanga wind farm

      16 August 2022
    • World

      Semiconductor boom turns to bust

      16 August 2022

      Tencent plans to offload R400-billion Meituan stake: sources

      16 August 2022

      Ether leaps higher on verge of Merge

      16 August 2022

      Institutions eye crypto but retail investors remain nervous

      15 August 2022

      Tencent woes mount, even after $560-billion selloff

      12 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Africa Data Centres
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»News»Investors turn upbeat on MTN’s prospects

    Investors turn upbeat on MTN’s prospects

    News By Marcia Klein10 May 2019
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Between 6 March, the day before MTN announced its results for the year to December, and 9 May, when it published a first-quarter trading update, its share price has increased by 36% from R76.06 to R103.45.

    This performance, which should be viewed against MTN’s steady decline from a high of over R260 in September 2014, reflects the outcome of a clearly communicated plan to deal with issues that have not sat well with investors for some years.

    In March, the group defined its position and outlined its future direction, and a flurry of activity since then — including board changes, positive quarterly update, imminent Nigerian listing and asset disposal programme – has hit the right notes with investors as the price continues its upward trajectory.

    In the quarter to March, MTN’s group subscribers increased by four million to 236.6 million quarter on quarter

    It still has a long way to go, given the five-year share price decline of more than 50%.

    In the quarter to March, MTN’s group subscribers increased by four million to 236.6 million quarter on quarter, with active data subscribers increasing by 2.6 million to 81.3 million. Active MTN Mobile Money customers increased by 1.2 million to 28.3 million.

    The telecommunications giant reported a 10% year-on-year increase in group service revenue to R33.2-billion (MTN South Africa’s service revenue increasing 4.6% to R9.1-billion, with an earnings before interest, tax, depreciation and amortisation (Ebitda) margin of 38.8%.

    South Africa, Nigeria

    MTN South Africa had 24.1 million prepaid users at the end of the quarter, down almost 5% on the previous quarter, although its 5.9 million postpaid subscribers were up 1.2%. Data and fintech revenue increased by 3.1% and 21.1% respectively, while digital and outgoing voice revenue declined by 35.7% and 4.4%.

    MTN Nigeria’s service revenue increased 13.4% to R10.8-billion, with a margin of 53.3%.

    In terms of its programme to sell assets, the group signed an agreement with American Tower Corporation to buy out its shareholder loan in ATC Ghana for US$61-million, and is at an advanced stage in disposing of its shareholding in Mascom Wireless Botswana for $300 million.

    Phuthuma Nhleko

    The listing of e-commerce joint venture Jumia provided a market value for its 18.9% investment, and conversion of MTN Nigeria to a public company was completed ahead of its listing, although its legal woes in Nigeria are likely to drag on.

    The quarterly update follows close on the heels of a board shuffle, which includes former deputy finance minister Mcebisi Jonas coming in at the end of this year to replace chairman and long-term MTN director Phuthuma Nhleko.

    With analysts calling MTN a buy, hold and sell almost in equal measure, the quarterly update may provide further clarity and add impetus to the swing toward a more positive investor sentiment.

    The external environment has been helpful, with oil price running and Nigerian currency steady – and elections there went through peacefully

    A number of things turned in the right direction following the results announcement in March, says Mergence Investment Managers portfolio manager Peter Takaendesa.

    “Firstly, the numbers were stronger,” he says. “Secondly, there has been clear communication on its plans to unlock value in non-core assets. What followed is that the external environment has been helpful, with oil price running and Nigerian currency steady — and elections there went through peacefully.”

    With additional positives from the Jumia listing and asset disposal progress, “a couple of things have come together at a time when results are also improving”.

    ‘Strong position’

    “My view is that if there are no other outside shocks, the company is in a strong position and every metric is on the right track,” he says, adding that revenue growth has accelerated and profitability has improved, compared to 2015 to 2018 where many of these metrics have been flat to negative.

    An operational turnaround is in progress, and concerns about gearing have received a lot of attention with the result that gearing has been largely reduced. With more disposals coming through, the gearing issue will be almost completely removed.

    Governance has also improved, with a new board and advisory committee in place — and the new management team “is delivering in line with strategy and guidance”.

    The only unknowns, says Takaendesa, are risks in some markets where there is no quick fix.

    • This article was originally published on Moneyweb and is used here with permission
    Jumia Mcebisi Jonas MTN MTN Nigeria MTN South Africa Peter Takaendesa Phuthuma Nhleko top
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleVenezuela’s failed cryptocurrency is the future of money
    Next Article Bitcoin sees its biggest gains since 2017

    Related Posts

    Load shedding returns, and may last until Thursday

    16 August 2022

    Jo’burg to issue RFP for 500MW of electricity ‘within weeks’

    16 August 2022

    MTN hires outgoing Icasa CEO Willington Ngwepe into top role

    16 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    HPE SimpliVity: addressing SMBs’ data conundrums

    16 August 2022

    Digital transformation – don’t get caught unprepared

    16 August 2022

    Seven reasons your business needs IP surveillance cameras

    15 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.