LONDON, (The Southern African Times) – South Africa’s MTN Group has repatriated last year’s dividend of $280 million (R4.2 billion) from its local unit in Nigeria.
The company reported the payout recently during the release of preliminary financial results for six months to June 30, 2021.
The funds from Nigeria are part of approximately $650 million (R9.3 billion) in cash the pan-African telecoms giant returned from its subsidiaries.
MTN had been struggling to get dividends out of its subsidiaries due to the challenges of securing foreign currency in Nigeria and some other markets where it operates.
As a result, MTN was forced to suspend dividend payout for the 2020 financial year. The company also cited other reasons for the suspension, such as the timing of proceeds from an ongoing asset realisation programme (ARP) and the impact of the Covid-19 pandemic.
“Cash upstreaming from Nigeria remained challenging 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 company had said in March.
The group has now fully secured its cash dividend from Nigeria, in what is one of the two positive developments concerning MTN that will come as a relief to shareholders.
The group’s complete half-year results are expected to be released on August 12 and it has told investors to expect between 75 per cent to 85 per cent drop in profit or earnings per share (EPS). This is due to an impairment charge involving its Yemeni business and the decoupling of its operation in Syria.
The sale of MTN Group’s 75 per cent stake in MTN Syria is part of ongoing attempts to exit markets in the Middle East over the next three to five years, with a plan to fully focus on core African markets.
MTN plans to raise about R15 billion ($1 billion) from shareholding sales in markets outside Africa, proceeds which will be used to reduce its huge debt of nearly R50 billion ($3.5 billion) for the year to December 2020 as well as allocate more capital investments in Africa by 2025.
In Nigeria, MTN, through its local unit, has earmarked N600 billion ($1.5 billion) over the next three years to expand broadband access in the country.
For MTN Nigeria, half-year 2021 results show that service revenue increased by 24.1 percent year-on-year, despite the number of its mobile subscribers declining by 7.6 million (nearly 10%).
“Operationally, our mobile subscribers closed H1 at 68.9 million, down 9.9% from December 2020. This was due to the regulatory restrictions on new SIM sales and activations, which was lifted on 19 April 2021,” MTN Nigeria’s CEO, Karl Toriola, said on an analyst call.
While user numbers fell, MTN Nigeria company managed to increase service revenue to N790.3 billion (about R27 billion, $1.9 billion) driven by a surge in data usage.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 27.6 per cent to N417.2 billion ($1 billion) while transaction volume for mobile money increased by 280.8per cent year-on-year to 55.6 million. Its total MoMo active subscribers reached 6.1 million,” the financial statement said.