Shareholders of MTN would be getting a total dividend of 6 pesewas for every share held.
This was after the company announced a final dividend payment of 4 pesewas as captured in its 2019 financial statement.
The announcement was influenced by the GH¢1.4 billion Profit After Tax posted by the telecoms giant for 2019.
Details of dividend payment to shareholders
Total dividend payment of 6 pesewas represents about 20 per cent per share increase over the 5 pesewas that was paid in 2018.
The 6 pesewas dividend would translate into a cash payment of about GH¢737.4 million and would equal about 12.2 billion shares.
This represents cash payout of about 73 per cent of the Profit After Tax of 1 billion Ghana cedis for 2019.
Breakdown of the dividend payment
On September 13 2019, MTN first paid an interim dividend of 2 pesewas per share, this represented a cash payment of GH¢245 million.
The telecoms operator is planning to pay 4 pesewas per share which translate into GH¢429 million which would be paid after the May 2020 Annual General Meeting in Accra.
In 2018, MTN paid out GH¢614 million at total dividend payment at 5 pesewas per share.
All shareholders registered in the books of Scancom PLC at the close of business on Thursday, 30 April 2020 will qualify for the final dividend.
Who can benefit from this dividend payment?
Consequently, an investor purchasing MTN Ghana shares before this date will be entitled to the final dividend. However, an investor buying MTN Ghana shares on or after Tuesday, 28 April 2020 will not be entitled to the final dividend.
On Monday, 25 May 2020 the dividend will be transferred electronically to the bank accounts or Mobile Money wallets of shareholders who make use of these facilities.
The dividend statement was approved by the board of directors on 25 February 2020.
Financial performance for 2019
MTN ended last year with a Profit before Tax of 1.4 billion Ghana cedis. This represents a significant increase over the 1 million Ghana cedis what was recorded for 2018.
On the other hand, Profit After Tax also stood at GH¢1.1 billion compared to GH¢754 million in 2018.
Capital Expenditure in 2019 was GH¢1.1 billion, representing a significant increase with GH¢825 million that was recorded in 2018.
Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 65.7% with a YoY EBITDA margin expansion of 13.2 percentage points (pp) to 50.8%. Under IAS 17 and adjusting for the management fee, the like-for-like EBITDA margin expanded by 5.9 pp to 43.5% (2018 EBITDA margin: 37.6%).
The margin improvement was supported by lower operating expenses, prudent revenue initiatives as well as distribution efficiencies.
Other drivers of MTN’s Sterling financial performance
Service revenue increased by 22.8% year-on-year (YoY), underpinned by growth in revenue from voice, data and Mobile Money (MoMo).
Voice Revenue (up 19.4% YoY) was driven by an increase in the number of active subscribers (+11.2%), the benefits of various customer value management (CVM) initiatives and pro-consumer activity, as well as continued improvements to our network.
As new lines of revenue continued to grow much faster than the traditional business, voice revenue’s contribution to service revenue decreased from 46.3% to 45.0%.
Solid data revenue growth (up 32.5% YoY) was attributable to growth in active data users# (+26.6%), growth in the number of smartphones (+18.5%) on the network and an increase in data usage (up 85.9% to 256,301 Terabytes). Data revenue’s contribution to service revenue expanded from 26.3% to 28.4%.
Mobile Money revenue continued to grow strongly (up 28.0%) in a year in which MTN marked 10th anniversary of MoMo in Ghana.
MoMo growth was attributable to an increase in the number of active subscribers (+8.9%), commissions on cash-in-cash-out transactions, increased transactional activity of person-to-person (P2P) transactions as well as good growth in more advanced services – such as retail merchant payments.
MTN and regulatory developments
On the regulatory front, during the year the Payment Systems and Services Act 2019 was passed into law which governs the way mobile money services are conducted. As required of existing players, MTN has applied for the new licence.
MTN Ghana continues to engage with regulatory stakeholders and maintains a firm focus on achieving continued improvements in customer experience.
Following the expiry of certain technology licences in 2019, the NCA has renewed MTN’s 2G licence for 15 years. The company submitted applications for the renewal of MTN’s International Gateway and Fixed Access licences, which are pending NCA approval.