MTN Group Ltd is on track to meet a divestment target set in March after raising $140 million from asset sales that will slim down Africa’s largest mobile phone operator and refocus it on high-growth markets.
The logo of MTN is pictured in Abuja, Nigeria September 11, 2018. REUTERS/Afolabi Sotunde
MTN is reviewing a raft of investments under a three-year, 15 billion rand ($996 million) divestment plan that includes shedding loss-making e-commerce assets and exiting countries where it has no prospect of reaching first or second place by market share.
In the first half through June it sold its shareholder loan in ATC Ghana to American Tower Corp for 900 million rand and its interests in investment fund Amadeus and booking website Travelstart for 1.2 billion rand.
It has cut its stake in newly-listed Jumia Technologies to 18.9% from 29.7% after the listing and is in the process of redeeming MTN Nigeria preference shares for $315 million.
“So we’re well on track for our 15 billion rand (target),” Chief Executive Rob Shuter told reporters on Thursday.
The South African firm’s plan to dispose of its minority stake in Mascom Wireless Botswana for $300 million should be concluded in the second half.
MTN shares, which rose on Wednesday to their highest in a year, were down 2.1% by 1331 GMT against a 1% rise in Johannesburg’s Top 40 index.
In the six months through June, group service revenue rose 9.7% to 67.8 billion rand in constant currency terms, led by voice, data and financial services.
Headline earnings per share (HEPS), the main profit measure in South Africa, fell to 195 cents from 215 cents a year earlier, hurt by factors including new accounting standards, interest on fines and foreign exchange moves.
Using the previous accounting standard, HEPS grew 8.8% to 234 cents, while adjusted HEPS grew 12.1%.
Like peers, MTN has been broadening from a mobile player to offering digital and financial services in major markets while still growing its 39.7 billion rand revenue voice business.
Shuter said MTN will launch its music streaming service MusicTime in Nigeria, one of the biggest markets for music streaming, in the second half.
It has also launched its messaging app ayoba in three smaller West African markets and will expand it to other markets such as Nigeria and Ghana.
“For many years we built a network for voice consumers. We’re (now) repurposing it for mobile internet and we’re also repurposing it to service both enterprise and wholesale customers,” Shuter said.