MTN to move ahead with Nigeria listing

MTN Group has confirmed it will proceed with plans to list on the Nigerian Stock Exchange (NSE) over the coming months up to 2018.

The mobile operator presented an improved performance over the past six months in its interim financial results, despite what it described as challenging macroeconomic conditions in many of its markets “with Nigeria, continuing to experience weaker naira as well as hard currency liquidity challenges.”

Rob Shuter, Group President and CEO at MTN since March this year, said the 6.7% rise in group revenue (underpinned by a 10.8% growth in revenue for Nigeria) is a good start to the year.

“I think we have made good progress and we have set out very clearly what we are asking of ourselves. We also need to get better at managing the kind of big issues and events that really come with managing a large number of complex geographies. I think we have made a respectable start.”

According to MTN, its Nigerian business is continuing to make progress with preparations to list on the NSE and should have the task completed in 2018 subject to market conditions.

The telco added that Nigeria is also the market it has chosen along with South Africa for the rollout of its operational execution programme called Project IGNITE.

MTN’s Net Promoter Score, which measures the likelihood of customers to recommend a company’s products or services, stands at 13% in Nigeria – although it is much higher in the telco’s other key markets including Iran (33%) and South Africa (75%).

Ralph Mupita, Group Chief Financial Officer at MTN says the use of constant currency to measure financial performance provides a better visibility of the underlying operating performance of MTN.

“If you look at all our operations across the 23 markets relative to the rand over the period, they have all weakened and so the first major impact of this is that you will see that our reported results are lower than our constant currency results if you look at revenue, EBITDA and other main KPIs. Particularly in Nigeria, where the weaker naira has had a significant impact on network opex and has resulted in lower margins as you will have seen at the end of December 2016.”

While Nigeria EBITDA declined 15% over the six months to 30 June in rand terms, driven by the naira devaluation and network opex according to Mupita, MTN reported service revenue growth of 11% in the country over the same period.

Overall MTN experienced a 3.6% drop in subscribers to 231,8 million over the six month period, with Nigeria and Ghana recording the biggest drop. The number of MTN subscribers in Nigeria has decreased by 14,3% to 53,1 million.

Rob Shuter emphasised the telecommunications company’s unshaken belief in the potential of its Nigeria business which has historically been its most profitable market.

“One of the challenges for the Nigerian economy is that it is very much resource focused unlike South Africa which is a much more diversified economy, but things are looking better. Even though the oil price has not moved much, the production has increased, we see some lift coming back into the market, we are seeing more availability of foreign exchange for the kinds of things that we need to do there.

“Our revenues were up 11 percent, data is up 70 percent. It is a vibrant market and I think MTN is well placed there. I’ve actually been encouraged by our performance there in the last couple of quarters. I think things will look a lot better going forward.”