MTN share price resumes uptrend after FY21 results and dividend reinstatement
In the below article we summarize the FY21 results from MTN and take a look at how the share price is reacting to the news.
MTN FY 2021 results
The MTN Group has delivered a solid set of results for the year ending 31 December 2021, a summary of which is as follows:
Service revenue increased by 18.3% to R171bn
Data revenue increased by 36.5% to R56.5bn
Fintech revenue increased by 30.9% to R15.9bn
Earnings Before Interest Tax Depreciation AMortisation (EBITDA) increased by 23.7% to R80.8bn
Adjusted Headline Earnings per Share (HEPS) increased by 26.6%
Group net debt to EBITDA at 0.4 times
Operating free cash flow increased by 35.2% to R38.3bn
Final dividend of 300c per share declared
Comment on MTN FY21 results
The MTN Group has seen strong gains in revenue, with substaintial growth recorded across all of its key divisions. Service revenue remains the most substantial for the group. The Nigerian contribution thereto (+23.2%) lead growth, while service revenue from its South African operations was modestly higher (+6.5%), although inline with group guidance.
MTN has done well to continue deleveraging the business with net debt to EBITDA having essentially halved over the financial year. MTN remains extremely cash generative and is again rewarding shareholders by reinstating its full year dividend. Forward guidance suggests that this dividend offering could see an annual escalaltion of around 10% in the new year. A forward price to earnings ratio of around 15 times is a slight premium to the industry mean (13 times), although the group is now delivering growth while still offering an attractive yield.
MTN – Technical Analysis
In a previous note on MTN (Technical Tuesday report) we highlighted the bullish wedge continuation pattern which had formed. The price has since broken out of the pattern and exceeded the 19740 resistance target.
The price has since produced its first pullback from the new short term high. The pullback from the recent high looks to have ended with a sharp reversal. In turn it appears as though the longer-term uptrend is now resuming once more. 19740 and 21155 become the initial upside targets from the move. Traders who are long might consider using the dotted trend line on the chart as a trailing stop loss indication for the trade.
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