MTN boosts dividend, flags blow to costs from power crisis

MTN, Africa’s largest wireless carrier, increased its dividend to shareholders by 10% to R3.30 a share as revenue and profits rose.

The payout matched the guidance the company gave a year ago, but missed the Bloomberg analyst consensus of R3.50 per share. The board again anticipates paying a minimum ordinary dividend of at least R3.30 per share for this year, MTN said.

The Johannesburg-based company flagged concerns about its home-market, South Africa, where it generates a quarter of its revenue, and where the state-owned power utility implemented rolling blackouts on more than 200 days during 2022.

Read all our Eskom coverage here.

Operating conditions were significantly affected by national grid power availability, which worsened in the second half of the year, the company said in its results statement on Monday. Investment in mitigating the impact of power cuts on the group’s network, which included dealing with vandalism and additional security on sites, put additional pressure on operating costs, MTN said.

Read: Nokia signs deal with MTN to expand 5G in SA

The overall effect of rolling blackouts “on topline and costs” was a negative impact on Ebitda at its South African operations of 695 million rand ($38 million), equivalent to 3.4%. MTN aims to complete its South African network resilience plan by the end of May.

MTN said it has received offers for minority investments in its fintech structure from potential strategic partners and the review of these offers and engagement with potential partners is expected to conclude by mid-May 2023.

Read: Economic diplomacy versus the cost of doing business in Africa

The firm also plans to separate its fiber business by 2024, according to its statement. Telecommunication operators on the continent have been working on unlocking value from the different parts of their businesses, such as towers, fiber and their fast-growing fintech operations.

Read the Sens here.

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