MTN’s Rob Shuter to step down as CEO in March 2021
‘Four years at MTN is like eight years anywhere else,’ says Shuter
Rob Shuter, the man brought in to contain the fallout from MTN's clashes with regulators three years ago, will bow out as CEO in March 2021, leaving the company in the midst of executing a turnaround strategy he formulated.
Shuter's departure will most likely turn the spotlight on CFO Ralph Mupita, the former CEO of insurance giant Old Mutual's emerging market division, and several country heads as possible successors.
“Four years at MTN is like eight years anywhere else,” jokingly said Shuter, who replaced Sifiso Dabengwa after the latter resigned in 2016 following a $5.2bn dispute with Nigerian authorities that exposed operational flaws in Africa's biggest mobile operator.
MTN has delivered a near 39% jump in annual headline earnings largely driven by the group's operations in the rest of Africa. Ghana and Nigeria have outperformed with double digit revenue growth helping offset weaker growth in the local market. The company's CEO, Rob Shuter, steps down at the end of March. He spoke to Business Day TV about the numbers and prospects for growth as he hands over the baton.
With a full year left on his contract, Shuter said the announcement was made early to allow MTN's board time to find a successor and ensure a seamless handover.
“The CEO and the board have put together a strong leadership team below him [Shuter] and I can count up to five other executives who are in a strong position to take over the group CEO position," said Peter Takaendesa, a portfolio manager at Mergence Investment Managers.
He pointed to Mupita as one such example, together with a number of MTN country CEO's who are “running those businesses on the ground with solid industry experience.”
An appointment of an insider would hand MTN a CEO who would have been part of the group's strategic thinking, which includes pursuing growth in financial services, music streaming and mobile gaming to counter falling margin in basic telecoms services.
MTN, which reported an almost 40% rise in annual earnings, is also in the middle of selling non-core assets having raised R14bn in the last, with plans to sell off another R25bn in the next five years.
“The group has implemented a solid turnaround strategy that will see him leave the group in a stronger operational position in 2021,” said Takaendesa.
Shares in MTN have dropped around 45% since Shuter took over in 2017, reflecting a series of clashes with regulators in Nigeria, one of the company's biggest money spinners.
In the last financial year, MTN reported an almost 40% jump to 468c in headline earnings per share, the widely watched measure of performance that strips out certain one-off, non-trading items.
But that bottom line figure is still half the level MTN reported in 2015, the year before it agreed to pay a reduced $1.7bn fine in Nigeria for failing to disconnect unregistered SIM card users.
The company, which is yet to reach an agreement with SA's Competition Commission on reducing data prices, added 18.2-million subscribers, with 251-million across its operations at the end of December.
“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 SA,” said Shuter.
Ian Woodley an analyst at Old Mutual said MTN SA's results were probably in line with expectations, “but were still poor relative to the other geographies.” He highlighted negotiations with the competition watchdog as an ongoing challenge, together with wholesale revenues for the company, which are largely from Cell C and are therefore dependent on whatever resolution is reached for the financial restructuring the country's third largest mobile operator.