MTN Nigeria to Issue up to N23 billion in Series 3 Commercial Paper Notes

MTN Nigeria Communications Plc (MTN Nigeria) has notified the Nigerian Exchange Limited (NGX) and the investing public of its proposed issuance of up to N23bn (Twenty-Three Billion Naira) Series 3 Commercial paper notes under its N150bn (One Hundred and Fifty Billion Naira) Commercial Paper Issuance Programme.

Commercial paper is an unsecured form of promissory note that pays a fixed rate of interest. It is typically issued by large banks or corporations to cover working capital needs.

MTN says the issuance is part of the Company’s strategy to diversify its financing options, with the funds deployed towards working capital and general corporate purposes.

MTN Nigeria has generated more profit from operations than African peers even amid a difficult environment as the company’s cost control measures continue to bolster margins.

MTN’s Ebitda margin is 53.60 percent at June 2022, and that compares with South Africa’s Vodafoam Group, (38.80 percent); Kenya’s Safaricom’s (50 percent); Airtel Africa, (48.30 percent); South Africa’s MTN Group, (41.60 percent), and Senegal’s Sonatel, (44.20 percent).

The Ebitda margin, which is calculated as earnings before interest, tax, depreciation and amortization divided by total revenue, is a good indicator of a company’s financial health as it doesn’t consider the effect of unique decisions and tax laws when assessing the performance of a company.

The Nigerian telecoms giant has been implementing cost efficient strategies which are responsible for higher profit margins.

Earnings before interest and taxation, and amortization (EBITA) rose 22.10 percent to N509.31 billion in June 2022 from N417.21 billion the previous year.

It has a strong cash flow to pay debt, reward shareholders in the form of dividend payment, and fund expansion plans across the country.

Free cash flow from operating activities stood at N184.19 billion as at June 2022, which is 17.60 percent higher than 2021’s N156.62 billion.