Telecommunications group MTN Group has welcomed Moody’s Investor Services upgrade of its credit rating outlook to ‘stable’ from ‘negative’, in line with its rerating of the South African sovereign, and reflecting the company’s strong financial performance and reduced leverage.
“As a company domiciled in, and with strong credit linkages to, South Africa, our company credit rating has benefited from Moody’s decision to upgrade the sovereign’s outlook to stable from negative,” said MTN Group president and CEO Ralph Mupita.
He said that MTN’s work to deleverage the business faster and its strong financial performance have also been recognised by Moody’s.
This followed the October 2021 S&P Global Ratings upgrade of the group’s standalone credit rating to investment grade for the first time in five years.
“MTN Group will continue to deleverage the business faster by reducing our US dollar debt, improving the funding mix and continuing to execute on our asset realisation programme. We will also retain our focus on upstreaming cash from operations as well as keep a tight handle on liquidity management at a holding company (Holdco) level.”
MTN Group’s 2021 financial results showed an 18.3% increase in service revenue in constant-currency terms to R171.8-billion and an improvement in the Holdco leverage to 1.0x from 2.2x in 2020 as Holdco net debt reduced to R30.1-billion from R43.3-billion.
“In line with our Ambition 2025, we are committed to faster deleveraging of the Holdco balance sheet, which gives us the financial flexibility to take advantage of the attractive growth opportunities we have identified. Moody’s upgrade to our outlook encourages us that we are on track with the delivery of our strategy,” said MTN Group CFO Tsholofelo Molefe.