Mobile operator’s continued exit from non-core businesses and investments could cause it to lose out on the potential long-term growth of entities
MTN continues to make good on its promise to exit non-core businesses and investments. Analysts say this could cause the company to lose out on the potential long-term growth of entities such as the newly-listed Jumia from Nigeria but ensure returns to shareholders as the operator attempts to boost its return on equity .
Peter Takaendesa, portfolio manager at Mergence Investment Managers, said MTN has already reduced its overall gearing “to comfortable levels but they want to reduce [US dollar]-denominated debt to reduce risk of currency devaluations”. The disposals announced on Tuesday follow the sale of their shareholding in Botswana operator Mascom.
“The asset disposals will also help the achievement of the 10%-20% dividend growth guidance near term as they finish paying the Nigeria fine,” he said.
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