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Comments (4)
Vish Naidu
16 May 2022How will MTN performance impact on MTNZAKHELEFUTHI. This share is currently trading around R30 and MTN around R170. MTNZAKHELEFUTHI will mature at the end of 2024. MTNZAKHELEFUTHI depends on MTN to settle its liabilities.
The Finance Ghost
16 May 2022Yes, MTN ZF requires a specific analysis of the balance sheet in the structure. The current trends in MTN are very encouraging but the key thing to keep an eye on is upstreaming of cash from the African countries. I also noticed in the country-specific results over the past few weeks that capital expenditure has increased substantially, which suggests lower cash flows to send “home” as MTN invests for growth on the continent.
Godfrey
16 May 2022I would like to hear what you make of the growth in transactions by these MNOs: Vodacom reporting $325 billion (saying they are the biggest), while MTN had more than $200 billion (can’t recall exact number but Nigeria had $60 billion for Q1)). How important are these and do you have any insight on margins?
The Finance Ghost
16 May 2022Depends if you’re looking at just the FinTech transactions or a broader definition that includes digital value-added services. I don’t have specific insights into the margins but much like non-interest revenue in banking, I think the point is that the net income drops straight to the bottom line without needing additional capex etc. This helps drive EBITDA margin, with MTN running at really impressive levels (and above a US peer like AT&T for example). In general, I think the growth opportunity in these African countries is substantial.