South Africa’s MTN Group may list its Nigerian unit on the stock exchange in Lagos once it has resolved a disputed $3.9 billion fine with authorities, its executive chairman said on Thursday.
MTN also reported Full Year 2015 results that showed revenues were up a mere 0.1 percent to R146.3 billion ($9.3 billion) and said it has set aside 9.3 billion rand ($600 million) to cover a potential settlement of a fine imposed by Nigerian Communications Commission (NCC) last year for failing to cut off unregistered SIM card users.
“MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards (IFRS). Discussions with the Nigerian authorities continue on the matter,” Phuthuma Nhleko, the company’s Group Executive Chairman said.
On 24 February, MTN Nigeria made a without prejudice good faith payment of N50 billion (approx. US$ 250 million) to the Federal Government of Nigeria in relation to the NCC fine relating to the late disconnection of subscribers, on the basis that this would be applied towards a settlement.
The company also agreed to withdraw the matter from the Federal High Court.
The provision for the fine at the end of the reporting period negatively impacted the Group Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) which decreased by 8.6 percent and headline earnings per share (HEPS) also fell by 51.4 percent to 746 cents.
Attracting MTN to list on the Nigerian Stock Exchange would be a big win for the bourse which has sought to encourage more listings from large private firms operating in the country.
BusinessDay calculations show MTNs Nigeria business which is its largest subsidiary with about 61.2 million subscribers and makes up about 40 percent of group revenues could be worth as much as $7 billion.
Nhleko said the Nigerian operations in particular experienced a very challenging year with weak economic conditions and the limited availability of US dollars contributing to a lower-than-expected performance.
Ferdi Moolman, CEO of MTN Nigeria said: “We have invested more than $16bn in Nigeria over the past 15 years and contribute an estimated 4.5 percent to GDP. We are proud of the fact that we are an integral part of the Nigerian economic and social fabric.
“We remain committed to the country and our top priorities are to improve network and service quality, as well as data speeds for our customers. Compliance with regulatory requirements also remains a focus.
“Although subscriber registration is highly complex, given limited national identity databases and personal documentation, we remain committed to registering subscribers with the use of improved systems and processes.”
In the period under review, MTN Nigeria invested $94 million in renewing its 2G licenses.
It also concluded the acquisition of Visafone Communications, a 4G/LTE licence and digital TV spectrum.
MTN is proposing a final dividend of 830 cents per share, with total dividend of 1,310 cents per share.
The firm’s FY EBITDA margin decreased to 40.9 percent, while voice traffic and data traffic increased 14.5 percent and 108.5 percent respectively.
Moolman concluded: “We have put in place the operating and management structures, as well as made critical investments, to ensure that we improve our competitiveness in 2016. MTN is an enabler of socio economic growth in Nigeria. “Our infrastructure supports critical sectors of the economy, from financial services to oil & gas and commerce. We remain committed to Nigeria and will continue to invest in the country through our operations and the MTN Foundation”.
MTN Nigeria is the largest music distributor in Africa and its investments in Mobile Money and Africa Internet Holdings (which houses well-known brands like online retailer Jumia and real estate player Lamudi) provide an exciting platform for the next phase of evolution of the mobile telecoms sector.
The MTN Foundation has invested N18 billion in 550 projects and empowered more than three million people in communities across Nigeria since its inception and focuses on sustainable projects in three key areas, namely health, education and economic empowerment.
MTN said its Nigerian subsidiary continues to engage with the regulator regarding ‘dominant operator’ ruling and suspension of regulatory services to find an amicable resolution.
PATRICK ATUANYA & Jumoke Akiyode
