MTN fetches R2.3 billion from sale of Jumia stake

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MTN's head office in Fairlands, Johannesburg.
MTN's head office in Fairlands, Johannesburg.
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  • MTN has been offloading some of its non-core assets to focus on is African mobile telecommunication markets.
  • The company also plans to sell its Middle East market and a stake in Iran's ride-hailing business.
  • The Covid-19 lockdown has supported its data service revenue, due to growth internet usage. 

MTN raised R2.3 billion from the sale of its 18.9% interest in online retailer Jumia Technologies, as part of its asset optimisation strategy that has seen it exit some of its non-core business ventures.

The company, which is Africa's largest mobile operator, is in the process of consolidating its mobile technology assets to focus on the African market, which has been its stomping ground for years.

Jumia, which is listed in New York, operates in 14 African countries and is considered a market leader in e-commerce, with a market capitalisation of $1.3 billion.

MTN said it had exited the company as part of its "asset realisation programme". It also fetched R204 million from the localisation of its 8% shareholding in MTN Zambia.

The company said in August it would begin its exit out of the Middle East by selling its 75% stake in Syria to Romanian technology investment company TeleInvest, in a process which would take between three to five years. The offloading of a stake in Iran’s ride-hailing app Snapp is also being considered.

In an operational update on Friday, MTN said its growth in the third quarter was supported by strong performance of its operations in South Africa, Nigeria and Ghana, which saw it add 12 million subscribers to hit 273 million users across its 21 markets.

Service revenue during the quarter increased by 11.4% to more than R43 billion, as Covid-19 restrictions drove demand for data usage. 

"We have now increased our full year forecast for capital expenditure to R26 billion, to ensure that our networks provide reliable connectivity and digital services to all of our 273 million-and-growing subscriber base,"  said Chief Executive officer Ralph Mupita.

The group also reported growth of 21% in fintech revenue and 37.5% in digital revenue, driven by the increased adoption and usage of digital offerings. 

MTN shares were up 2.5% at R77.43 in mid-morning trade.

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