(ITwebAfrica)– MTN has identified its initial public offerings in Ghana and Nigeria, originally scheduled for later this year, as a key target for the new financial year. This is as the telco reported improved results for the year ended 31 December 2017 in Johannesburg with a 6.8% rise in annual revenue on constant currency to R132 815 million.
Rob Shuter, Group president and CEO at MTN says a public offering of the company’s stock in both countries remains high on the agenda for the new year, even though there is no guarantee of wider interest from the public.
“How it will work in Ghana for example is that we will offer thirty five percent and the whole objective is to attract Ghanaian investors, but it is possible that there will be demand for only ten to fifteen percent and that’s where we will finish the programme and everyone there will be comfortable that we made the effort if that is where we ended up.”
MTN says the threshold for the minimum of stock to be sold through the Ghanaian IPO is ten percent, as prescribed by the Ghana Stock Exchange (GSE). Final approval of the IPO in Ghana will be come from the GSE and the Securities and Exchange Commission in Ghana.
Shuter says while they haven’t finalised the primary or secondary amounts to be raised in Nigeria, they don’t expect a material drop in the shareholding.
According to Shuter MTN views both IPOs as good initiatives, despite knowledge of the fact that they were driven primarily by regulatory requirements.
“The Nigerian IPO was a requirement for settlement of the regulation fine from two years ago, and the requirement to introduce local partners in Ghana was part of the 4G license application a year or so later. They are regulatory requirements, but they are also good initiatives and we already have twenty two percent in minority shareholders in Nigeria.
In Ghana introducing local partners will also be positive. We already have local partners in many of our markets. Subject to market conditions we would like to have both of them done in the first half of this year.”
Leveraging the demographic dividend
MTN had 52,3 million subscribers in Nigeria at the end of 2017 and managed to amass and increase revenue of 11,4% in constant currency despite challenges associated with the devaluation of the naira.
In Southern and East Africa and Ghana (SEAGHA) MTN boasts 38,7 million subscribers and revenue there increased by 17,3% in constant currency.
Shuter says the telco is looking to exploit the opportunity provided by population growth in all 22 markets where it currently has access to 645 million people.
“We anticipate population growth of fifty million in the next few years. Population growth alone almost gives us another South Africa in the portfolio, and the hallmark of the countries that we are in is that the populations are very youthful. Sixty percent for them are under the age of thirty four. These are customers that are born digital and mobile and therefore adopt the services much quicker.”
The MTN board has declared a final dividend of 450 cents per share. The company reported headline earnings per share (HEPS) of 182 cents compared to a 77 cents headline loss per share in 2016 when performance had been impacted by the Nigerian regulatory fine.