MTN is to pay a total dividend of GHS0.06 per share for 2019 financial year to its shareholders. Having made an interim dividend payment of GHS0.02, shareholders would receive an additional GHS0.04 per share. The directors would declare the dividend to shareholders at the upcoming annual general meeting in May.
The telecom giant posted good financial performance for the 2019 financial year, posting a profit before tax (PBT) of GHS1.4 billion. This represents a 33.7 percent increase from the 2018 financial year. Subsequently MTN is expected to propose a dividend of GHS0.06 per share according to their financial statement. Though the company has lost some share value, (currently GHS0.68 from GHS 0.75), their dividends will give investors some respite.
The financial performance shows an enormous leadership in the industry by market share in all categories of their business. There are advanced services that boost their business.
Position in the Market – MTN
The telecom giant leads the market space with about total subscriber population of 22.6 million. The company has the largest market share for all the service areas being voice, mobile data, mobile money and enterprise and wholesale. Their share of the various markets are 55.2 percent for voice, 71.1 percent for data and 98.0 percent for momo. Clearly the early mover advantage has yielded its fruits.
Service Revenues – MTN 2019 Financial Year
Of the range of services, the data services arm of the business showed the most growth of 32.5 percent, in revenues within the 2019 financial year. Though voice brought the highest revenue (GHS 2.3 billion), data services (with GHS 1.46 billion) showed the highest growth of 32.5 percent. Data which looks to be the darling boy of the pack (for now) contributed 28.3 percent to their total revenue of GHS5.1 billion. Total revenue growth year on year amount to 22.8 percent which led to 33.6 percent increase in profit after tax (PAT). The increased profit was achieved from growth in all services while utilizing scaling opportunities to reduce capital expenditure. This expenditure is related to investments into infrastructure and logistics to grow the business in its critical areas.
The mobile money business provides the lead in bolstering MTN’s employment capacity by providing almost 500,000 jobs.
The Next Wave – YEAR 2020
In their next wave of growth, MTN is looking to further drive data, reposition digital services and rapidly scale up the fintech and momo capabilities. Looking at development in the banking space, it seemed fintech could have taken the lead in revenue growth at some point. However, the coronavirus pandemic which has created a surge in demand for data could again see data emerge as the leader in both absolute revenues and revenue growth for the year 2020. There are however opportunities for intrinsic growth. MTN still has a large number of inactive data and momo users who they could convert into active users. Though they have 15.1 million mobile money subscribers, only 9.1 million are active. Out of 20 million data subscribers, 8 million are active.
The growth opportunities within MTN should offer some incentives to investors with what looks like a consistent yearly dividend payout. The dividend of GHS 0.06 per share is representing a direct dividend return of 8.8 percent per share.
This article by Ghana Talks Business does not in any way suggest that you buy MTN shares. Please contact your investment advisor if you need to buy shares of any company or participate in the stock market