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MTN-Nigeria Lists Tomorrow 16th May, 2019 - See Our Take from the List

MTN-Nigeria Lists Tomorrow 16th May, 2019 - See Our Take from the Listing

 
The long awaited listing of the MTN shares on the floor of The Nigerian Stock Exchange is now closer than ever, Commenting on the announcement, FerdiMoolman, CEO of MTN Nigeria said "It gives me great pleasure to confirm that the official listing via introduction of MTN's shares on the NSE will take place on Thursday May 16."
The listing which will be done by way of introductory listing will avail the initial holder of MTN shares the opportunities to publicly trade their shares while other intending share holders will do so through their respective shareholders. Talk to us at Heritage Capital Markets Limited for timely positions in the shares. You can also join our Whattsapp group via: https://chat.whatsapp.com/BzkRahnY7Ud1eVONNoe0eV
MTN Group is currently valued at about $18 billion, MTN Nigeria is said to contribute about 40% of the group's profits, and this should give an idea of the strength/size of MTN Nigeria. According to the listing details, MTN Nigeria would be listing a total of 20,354,513,050 shares at N90 implying a market capitalization of N1.831 trillion.

Financial Performance

MTN Nigeria reported a solid first quarter with Service Revenue appreciating by 13.40% over the comparable quarter of 2018, This performance was led by a 32.40% increase in data revenue and a 12.70% increase in voice revenue. The telecommunication firm seems to have experienced a general slowdown in performance during the election period, as this glaringly impacted its voice revenue growth.

MTN Nigeria Revenue Brief: 2018/2018

Revenue

2017 (Mill)

2018 (Mill)

%Change

Other Revenue

31,607

48,004

51.88

Data Revenue

108,132

150,658

39.33

Fintech Revenue

21,540

28,588

32.72

Voice Revenue

659,760

783,059

18.69

Digital Revenue

63,451

26,608

-58.07

Total Revenue

884,490

1,036,917

17.23

Growth in data revenue was enhanced by an increase in smart phone penetration, improved network quality and a 9.10% increase in active data subscribers to 20.4 million as against the previous quarter's performance indices.
Total subscribers improved by 3.60% over the corresponding quarter as its currently stands at 60.30 million.
Operating Expenses improved over comparable period of 2017 by 14.70% YoY, while Cost of Sales builds marginally by 7.60%, growing from N184.86 billion to N198.93 billion.

MTN Nigeria Expenses 2017-2018

Expenses

2017 (N'mn)

2018 (N'mn)

% change

OPEX

356,063

408,507

14.70%

Cost of Sales

184,860

198,935

7.60%

Total

540,923

607,442

12.30%

MTN Nigeria reported an EBITDA margin of 53.30%. On an IAS 17 basis the margin increased to 44.20%, up 2.40% YoY, this was driven by the growth in revenue and effective cost management.

MTN Free Cash Flow and CAPEX 2017-2018

 

2017 (Mill)

2018 (Mill)

2018* (Mill)

%change

AFCF

121,376

249,721

268,913

121.60%

Capex

225,019

184,173

184,173

-18.20%

EBITDA

346,395

433,894

453,086

30.80%

Other financial highlights are as stated below;

  • Service revenue grew by 17.2%
  • Voice revenue grew by 18.7%
  • Data revenue increased by 39.3%
  • Fintech revenue increased by 32.7%
  • Digital revenue contracted by 58.1%
  • Expenses increased by 12.3%
  • Data traffic increased by 56.3%
  • EBITDA grew by 30.8% to 453.1 billion (excluding the payment to CBN)
  • EBITDA margin grew by 4.6p.p to 43.6% (excluding the payment to CBN)
  • CAPEX intensity decreased by 7.4p.p to 17.4%
  • Total subscribers increased by 5.9 million to 58.2 million
  • Active data users increased by 4.5million to 18.7 million

Our Take

  • Listing portends significant liquidity opportunity for all existing holders of MTNN's shares,
  • The Federal Government also gains immensely by attracting MTN to liston the floor of the Nigerian stock exchange via taxes. For example;
  • Nigeria currently does not tax capital gains made from the sale of shares, however it does places a 10 per cent withholding tax on dividends paid by companies.
  • The government will also gain VAT on commission and fees paid to stockbrokers when shares are bought and sold. In other words, a company of the size of MTN will contribute immensely to government's tax revenue.
  • A major point of investment is the capital gains, usually induced by corporate earnings. MTN being a highly profitable company is likely to record consistent capital gains with ease, and such stands a high chance of boosting capital gains on its shares
  • Dividend Returns is another valid investment points for investors, and this is a major strength this company/investors will benefit from any active markets such as Nigerian market. If this is achieved, the company will play a major defensive roles to various portfolios and invariably become the investors' toast
  • In our opinion, taking timely position in the shares of MTN at listing is an intelligent investment decision, as it stands a high chance of protecting investments against the bear weather.
  • Talk to us at Heritage Capital Markets Limited for timely positions in the shares. You can also join our Whattsapp group via https://chat.whatsapp.com/BzkRahnY7Ud1eVONNoe0eV

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