Moody’s Investor Services has upgraded MTN Group’s credit rating outlook from ‘negative’ to ‘stable’, in line with its rerating of the South African sovereign and to reflect MTN’s strong financial performance and reduced leverage.
MTN Group President and Chief Executive Officer Ralph Mupita announced this in a statement saying, “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.”
He welcomed the news, saying that MTN is particularly encouraged that its work to deleverage the business faster and its strong financial performance have also been recognised by Moody’s.
In March, MTN Group’s 2021 results showed an 18.3% increase in service revenue in constant-currency terms to R171.8 billion (US$11.8 billion) and an improvement in the holding company (Holdco) leverage to 1.0x from 2.2x in 2020 as Holdco net debt reduced to R30.1 billion (US$2.06 billion) from R43.3 billion (US$2.97 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,” said MTN Group Chief Financial Officer Tsholofelo Molefe. “Moody’s upgrade to our outlook encourages us that we are on track with the delivery of our strategy.”
In October 2021, S&P Global Ratings upgraded 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,” said Mupita. “We will also retain our focus on upstreaming cash from operations as well as keep a tight handle of liquidity management at a Holdco level.”