MTN sticks to dividend but warns caped may be lower due to COVID-19 concerns

Africa's largest telecom company, MTN, is closely monitoring the impacts of COVID-19 lockdowns in its key markets, particularly in South Africa and Nigeria. The company's Chief Financial Officer, Ralph Mupita, highlighted three key areas of focus in response to the pandemic. Firstly, MTN is prioritizing the health and safety of its employees by implementing work-from-home principles and protocols. As an essential service, many staff members are still working to ensure that the network remains operational. Secondly, MTN recognizes the critical importance of its networks as essential infrastructure and is investing to maintain network stability amid a significant increase in data traffic, particularly in countries like South Africa and Nigeria where data usage has surged by 30 to 40% month-on-month. Lastly, MTN is actively participating in social initiatives and funds to contribute to addressing the humanitarian crisis caused by the pandemic. The company is committed to supporting its various markets and communities during this challenging time. Regarding ownership, Mupita confirmed MTN's intention to increase local ownership in Nigeria by approximately 14% over time, emphasizing the importance of more Nigerians participating in the success of the company. The annual report released by MTN this week indicated minimal changes despite the evolving economic landscape influenced by COVID-19. Mupita acknowledged the challenges posed by the pandemic on capital expenditure plans, citing supply chain disruptions affecting the delivery of network equipment. Consequently, the company anticipates lower capital expenditure for the year as it focuses on resilience and capacity investments in its networks. In terms of dividends, MTN remains committed to its dividend payout, with the recent 355 cents dividend being paid on Monday. However, the company will assess the situation and consider the impact of COVID-19 on its operations before making any decisions regarding the next dividend payout later in the year. MTN reassures investors of its resilience and commitment to navigating the uncertainties brought about by the global health crisis.