MTN scraps interim dividend - TechCentral

MTN scraps interim dividend

MTN Group shares fell on the JSE on Friday after Africa’s largest telecommunications operator by subscribers said it was scrapping an interim dividend payment to shareholders.

“MTN has made meaningful progress in strengthening its financial position and maintaining a healthy liquidity position. To sustain this, and in line with MTN’s capital allocation framework, the board has decided not to declare a 2020 interim dividend in the context of the Covid-19 impacts and the material uncertainties these present,” it told shareholders.

It also said it will cut its full-year dividend — if it pays one at all. The shares fells sharply in Johannesburg and were trading down more than 5% at R57.59 at 12.48pm.

“Should conditions warrant a final dividend, this would be no more than R3.90/ share, aligned to the current dividend policy. The key factors to consider will include the general macroeconomic environment, the status of cash ‘upstreaming’ from operating companies and the outlook for the holding company leverage ratio.”

In an earnings update for the six months to end-June 2020, the group said headline earnings per share will more than double. MTN, which will publish its results next week, said earnings per share will rise by between 160% and 170%.

EPS includes the benefit from gains on the disposal of the ATC Uganda and ATC Ghana tower joint ventures announced in March 2020, while the year-ago period includes 74c from gains on disposals.

Non-operational items

Heps benefited from non-operational items totalling about 46c/share (June 2019: 55c negative impact on Heps) of which more than half related to foreign exchange gains.

In the trading update, MTN said it will announce a new group CEO within the next four to eight weeks to replace Rob Shuter. TechCentral first reported earlier on Friday that Shuter will join Britain’s BT Group next year as CEO of its Enterprise business.

“Current group CEO Rob Shuter will complete his fixed four-year contract in March 2021 as announced earlier this year and this timing will enable a seamless handover to his successor,” the group said.  — © 2020 NewsCentral Media

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