By Loni Prinsloo.
MTN Group rose the most in two months as Africa’s largest wireless carrier returned to profit, declared a dividend that beat estimates, and said it plans to buy back shares.
The Johannesburg-based company declared a payout of R5 a share for 2025, compared with the median estimate of R3.82 in a Bloomberg survey, it said in a statement on Monday. The stock surged as much as 7.6% on the city’s bourse.
The board approved a new shareholder-remuneration framework that includes a minimum annual distribution of 40% of equity free cash flow, potentially raising this to 60% in the form of extra dividends or buybacks of as much as R6 billion ($356 million) over the next three years.
Profit jumped to R20.3 billion after MTN didn’t see a repeat of currency devaluations that dented some of its businesses across 18 markets — especially Nigeria, its second-biggest — in 2024.
MTN in 2020 decided to sell its 49% stake in its Iranian venture, but US sanctions against the Middle Eastern nation — in place since May 2018 — have stymied the efforts, with the conflict that broke out on February 28 further hindering the plan.
What was once a lucrative foothold in a large emerging market has become one of the most troublesome operations for the current Chief Executive Officer Ralph Mupita.
MTN had seconded three staff members to Iran but as of mid-January, “we don’t have people on the ground,” he said. “We have no insights into the operational detail on the network in current time.”
The carrier has maintained the non-controlling shareholding in Irancell since 2006 — signing a deal with the theocracy underpinned by the Islamic Revolutionary Guard Corps — but hasn’t extracted profit or invested in the operation for almost eight years because of the sanctions.
“The investment in Irancell is subject to a number of sovereign, regulatory, and commercial risks, which could result in the group failing to realise the full market value of its investment should it be required to dispose of any portion thereof,” the company said.
MTN is also in the process of buying towers firm IHS Holdings, with the assets being housed in its infrastructure unit.
“We have the fiber business that we have been building out with the east to west of Africa link, and the data centers that are being carved out, and then the towers will be the third pillar in the digital-infrastructure space,” Mupita said.
In South Africa, MTN’s biggest market, it has started to look at network-sharing opportunities with Vodacom Group and Telkom SA, with Mupita saying that the market needs more consolidation.
The group will also consider expanding its footprint in East Africa in the next three to five years.
“We won’t be flag planting, so to speak, by entering markets; we’d only look at markets that would be additive and transformational to the portfolio,” he said.