Africa's largest mobile operator by subscribers, MTN Group, resumed annual dividends on Wednesday, declaring a higher payout than previous guidance as a divestment plan made progress and the firm reported higher profit.

Last year March MTN suspended dividends to focus on reducing debt and because of uncertainty around cash upstreaming from Nigeria, the timing of proceeds from its asset realisation programme and the impact of Covid-19.

It said at the time it would announce a revised medium-term dividend policy in March 2022 and anticipated paying a total ordinary dividend of at least 260 cents per share for fiscal 2021.

“The board has looked at the cash balances, solvency and liquidity as well as the investment profile that we have in the year ahead and has declared a dividend of 300 cents per share, so 40 cents higher than our minimum,” said Group CEO Ralph Mupita.

It also announced a new dividend policy, to guide the market annually on a dividend amount, subject to its capital allocation priorities and market conditions, Mupita added.

With its new policy, MTN anticipates paying a minimum ordinary final dividend of 330 cents for financial year 2022.

By 0900 GMT, shares were up 5.40% at R196.71.

MTN, with 273 million customers in 19 countries across Africa and the Middle East, also gave new higher medium-term guidance, with group service revenue now projected at mid-teens percentage growth in constant currency terms, upgraded from low-to-mid teens.

MTN Nigeria, its biggest revenue generator, is forecast to produce service revenue growth of at least 20% from previous mid-teens target.

Its financial results for the year ended Dec. 31 showed group service revenue grew by 18.3% to R171.8bln rand, ahead of its medium-term targets, thanks to continued demand for data, digital and financial services.

It increased headline earnings per share (HEPS), the main profit measure in its home market of SA, by 31.8% to 987 cents.

Holding company net debt fell to R30.1bln rand from R43.3bln due to cash received from its operating companies as well as proceeds from its divestment plan.

Reuters