MTN Group reports higher earnings but suspends final dividend

MTN Group Chief Executive Officer Ralph Mupita.
MTN Group Chief Executive Officer Ralph Mupita.
Image: FINANCIAL MAIL

MTN Group on Wednesday suspended its final dividend as it focuses on faster debt reduction at its holding company even after posting a surge in 2020 earnings.

Reported headline earnings per share (HEPS), the main profit gauge for SA firms, came in at 749 cents for the year ended Dec. 31, compared with 468 cents in the previous year.

Group Chief Executive Officer Ralph Mupita said the company also suspended dividends due to uncertainties around cash upstreaming from Nigeria, the timing of proceeds from its asset realisation programme and Covid-19 impacts.

MTN is in the middle of a R25 bn divestment plan aimed at simplifying its portfolio over the next three to five years.

"We also want to deleverage the holdco's (holding company) balance sheet faster to create greater financial flexibility for the business to invest in growth opportunities that are arising from the digital acceleration," Mupita said in a media conference call.

These opportunities, he said, include investing in spectrum in SA, which was due to be auctioned from this month but now halted.

The board expects to announce a revised medium-term dividend policy in 2021 results in March 2022, said Mupita.

During the transition, MTN said the board anticipates paying a total ordinary dividend of at least 260 cents per share for the 2021 financial year and will consider returning further cash to shareholders in the form of special dividends or share repurchases after the release of its 2021 results.

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