MTN suspends dividend, says $280m yet to be repatriated from Nigeria

MTN says it has suspended paying a final dividend for 2020 partly because of its inability to repatriate $280 million (4.2 billion brands, N108 billion) from Nigeria.

According to Ralph Mupita, MTN group president and chief executive officer, other factors affecting full dividend include the timing of asset realisation programme (ARP) proceeds and the coronavirus pandemic.

Mupita said a revised medium-term dividend policy will be communicated when the 2021 financial results are released in 2022.

“Cash upstreaming from Nigeria remained challenged in terms of securing foreign currency in the market. During 2020, we upstreamed the equivalent of approximately R286 million from Nigeria, with approximately R4.2 billion yet to be repatriated as of 31 December 2020,” the statement read.

“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.

“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.”

Mupita said MTN added 29 million subscribers in 2020, to reach a total of 280 million across 21 markets.

He said the group reported a 52 percent increase in adjusted headline earnings per share, a four percentage point increase in return on equity to 17 percent and a more than doubling in operating cash flow to over $1.8 billion (R28.3 billion).

“We continued to perform favourably against our medium-term targets. In constant currency terms, service revenue grew 11.9% to R170 billion and EBITDA increased by 13.4%, maintaining our strong operating leverage,” he explained.

“Further to our previous announcement regarding our intention to focus on our pan-Africa strategy, we completed a comprehensive strategy review in Q4 2020 and are excited to introduce ‘Ambition 2025’.”

The company said it plans to invest 29.1 billion rands across its platforms and reposition by structurally separating its infrastructure assets and platforms, such as fintech, to reveal value and attract third-party capital and partnerships over the medium-term.