MTNN shares near 52-week high on impressive scorecard

Stock investors at the Nigerian Exchange Limited (NGX) expectedly responded positively to the shares of MTN Nigeria Communications Plc following the Telco’s exciting audited results for the financial year ended December 31, 2021, released last Friday.

The stock price of the leading Telco moved up on Monday, January 31 from N190 to N197.5, gaining N7.5 or 3.95percent, nearing its 52-week high of N209.9.

Its full-year earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 27.9percent to N877.1 billion; EBITDA margin increased by 2.1 percentage points (pp) to 53 percent.

Profit after tax (PAT) grew by 45.5percent to N298.7 billion. Earnings per share (EPS) rose by 45.5percent to N14.67 kobo. It proposed final dividend of N8.57 kobo per share. MTN Nigeria also reported enhanced guidance for service revenue growth of “at least 20percent” over the medium term.

Nigeria’s stock investors are taking early position on dividend-paying stocks like MTNN amid impressive earnings releases. This positive sentiment is expected to cause the stock market to stay positive this week. On Monday, stock dealers on the Nigerian Bourse exchanged 378,043 units of MTNN shares valued at N73.999million.

Earlier in their first reaction to MTN Nigeria results, the Tunde Abidoye’s team of analysts at FBNQuest Capital had said, MTNN’s proposed final dividend of N8.57 which is higher than the N5.90 final dividend for 2020 surpassed their dividend forecast of N7.32. “We expect the market to respond positively to the shares,” FBNQuest Capital analysts said.

“The final dividend implies a yield of circa 4.5percent. Taken together with an interim dividend of N4.55 paid in 2021, the proposed dividend implies a total dividend of N13.12 for 2021, up circa 40percent year-on-year (y/y),” FBNQuest Capital analysts said.

Read also: MTN is here to stay, share wealth with more Nigerians

Guided by a belief that everybody deserves the benefits of modern connected life, MTN Nigeria’s leadership position in coverage, capacity and innovation has remained constant since its launch in 2001. MTN Nigeria is part of the MTN Group – a multinational telecommunications group, which operates in 20 countries in Africa and the Middle East.

“In line with its run of stellar performance throughout 2021, MTNN’s fourth-quarter (Q4)/ full-year (FY) 2021 results came in strong. The new realities of the pandemic have driven increased adoption of digital channels and, by extension, data usage, thereby underpinning the company’s performance.

“Year-to-date, MTNN shares are up 4.4 percent, underperforming the NGX ASI by 3.8percent. We rate the shares Outperform. Our estimates are under review,” FBNQuest analysts noted.

In their top ten recommendations for the week, Lagos-based Vetiva Research analysts asked investors to BUY MTNN saying that they consider MTNN highly undervalued, but with strong fundamentals, and that its potential return in excess of or equal to 15percent is expected to be realized between the current price and analysts’ target price. Vetiva target price for MTNN stock is N232.01.

The leading telecommunications company’s Mobile subscribers decreased by 8 million to 68.5 million but returned to positive net additions in the fourth quarter (Q4) 2021. Active data users increased by 1.7 million to 34.3 million. Active fintech subscribers rose by 4.8 million to 9.4 million; also, MTNN Service revenue increased by 23.3percent to N1.7trillion.

MTN Nigeria is one of Africa’s largest providers of communications services, connecting approximately 68 million people in communities across the country with each other and the world.

Karl Toriola, MTN Nigeria CEO, said: “2021 was a significant year for our Company. We commemorated our 20th anniversary with a celebration of our customers and all the stakeholder relationships that enabled our journey. In addition, we made good progress towards our Ambition 2025 objectives, demonstrating the strength and resilience of the business. This reflects the firm foundations on which our business is built, the tenacity and commitment of our people, and the support of our stakeholders.”

“We continue to deepen our contributions to society in line with our priority to enhance shared value. During the year, our total contribution to the Government through direct and indirect taxes was N669.2 billion, up 83.4percent, representing approximately 40percent of our total revenue.

“We extended our interventions, in response to the challenges to our nation arising from the COVID-19 pandemic, providing a further N1.5 billion to the Coalition Against Covid-19 (CACOVID) in support of efforts aimed at curbing the spread of the virus. This is supplementary to other interventions to protect the health and well-being of our people, customers and stakeholders. We also worked hard across our business to embed new ways of working while harnessing the opportunities presented by the trends in digital adoption,” the CEO said.