March 11, 2020 / 6:49 AM / 24 days ago

UPDATE 2-South Africa's MTN Group CEO to step down in March next year

* MTN will find new CEO during 2020

* Full year HEPS up 38.9%

* Nigeria and Ghana star performers, South Africa disappoints

* Revises divestment plan target from 15 bln rand to 25 bln rand (Adds revised target for divestment plan)

By Nqobile Dludla

JOHANNESBURG, March 11 (Reuters) - MTN Group Ltd, Africa’s largest mobile network by subscribers, said on Wednesday Chief Executive Officer Rob Shuter would step down at the end of a four-year term in March 2021.

The company, which is in the middle of a revamp to re-focus on high growth markets on the continent and in the Middle East, said its board would find a new CEO during the year to enable a seamless handover.

Shuter, a former head of Vodafone Europe with a background in banking, took over from Sifiso Dabengwa in 2017, who resigned after Nigeria imposed a $1.7 billion penalty on the company for its failure to deactivate unregistered users.

The 52-year old told investors and analysts at MTN’s results presentation that he chose not to renew his contract but did not elaborate on the reasons.

During his tenure, Shuter overhauled MTN’s governance standards and is in the middle of a drive to secure returns in everything from financial services, music to video games.

The company also said headline earnings per share (HEPS) rose 38.9% to 468 cents for the full-year ended Dec. 31 on IFRS 16 accounting basis. On a like-for-like IAS 17 accounting basis, HEPS rose 61.7%.

Revenue rose by 9.7%, while service revenue grew by 9.8%.

“The group’s results were supported by double-digit growth in service revenue by both MTN Nigeria and MTN Ghana, while economic pressure, new data usage rules and a reassessment of recognition criteria for roaming revenue from Cell C impacted our performance in South Africa,” Shuter said in a statement.

MTN said once regulatory approvals have been finalised relating to the sale of its towers business in Ghana, it will have raised 14 billion rand ($876.70 million) from asset sales within the first 12 months of its three-year 15 billion rand divestment plan aimed at simplifying its portfolio.

The group revised its medium-term target for its divestment plan, and now wants to secure a further 25 billion rand in asset sales over the next three to five-years, Shuter said at the results presentation.

The value of assets that it is reviewing for sale and money expected from public offerings is 45 billion rand, but MTN is only targeting 25 billion rand of that for now.

They include an 18.9% stake in African online retailer Jumia, a 27 billion rand worth stake in Mauritius-headquartered IHS Towers, MTN Nigeria’s public offering and share sales to local investors in its Ugandan and Zambian units.

It does not anticipate a material impact on its near-term network rollout plans due to the coronavirus outbreak and was developing contingency plans to mitigate the impact.

$1 = 15.9689 rand Reporting by Nqobile Dludla; Editing by Shailesh Kuber and Emelia Sithole-Matarise

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