How data, fintech drove MTN Nigeria’s 9-month revenue to N1.2trn
DATA, FINTECH SUP PORT SERVICES PLAYED A KEY role in helping MTN Nigeria, one of Africa’s largest providers of communications services, post a whopping N1.2 trillion in revenues for the nine months of operation to September 30, 2021, an analysis of its earnings report has shown.
The performance represents a growth of 23.7 percent year on year over the N973.8 billion the telecom giant made in the same period last year when the Covid-19 pandemic was ravaging the world.
Revenues from data jumped by as much as 51.5 percent to N366 billion, while the fintech arm of the company saw revenue growth of a high 55.2 percent to N50.24 billion in just nine months.
The numbers were contained in a regulatory disclosure of its unaudited financial for the nine months ended September 30, 2021 which it filed to the Nigerian Exchange Limited (NGX)
The drive for financial technology in the Nigerian economy has gained prominence with the entrance of telecoms service providers as major players aiding revenue growth significantly, as well as the continued leverage on the growing population in Nigeria.
Consequently, as customers continued to increase their use of MTN’s Xtratime product and broader fintech services, there was expanded mobile money (MoMo) agent network for the Johannesburg-controlled Nigerian arm with the addition of over 234, 000 registered agents in the reported nine months, bringing the total number to approximately 630,000.
The company saw transaction volume in the nine months rise by more than three times to 93.3 million, led by an active subscriber base of 6.6 million, up 97.2 percent year on year.
The wireless carrier reported a decline in its mobile subscribers by 7.5 million to 67.5 million, but that this was impacted by restrictions imposed by industry regulator on new SIM sales and activations. However, the company’s active data users rose by 2.5 million to 33.2 million despite the company’s overall subscriber numbers continuing to decline over the last quarter, but at a reduced rate.
MTN Nigeria spent 34.4 percent more on capital expenditure (Capex) during the period at N261.1 billion compared to last year when it spent N194.2 billion for the nine months to September. The company said it continued to invest in its network to maintain service quality and aggressively expand footprint in terms of 4G with additional 2,723 sites.
The report also shows a healthy free cash flow of N373.4 billion, up by 23 percent from N303.6 billion last year. Regardless of a 27.9 percent year on year increase in core capex, excluding the right of use assets to N166.5 billion, capex intensity remained within target levels at 13.8 percent. Also, depreciation and amortisation rose by 13.3 percent to N216.2 billion, and net finance costs increased marginally by 1.7 percent to N97 billion from N95.4 billion in 2020 due to the lower interest rate environment.
Overall, MTN Nigeria recorded a PBT growth of 51.9 percent to N321.4 billion from N211.6 billion last year, reflecting a softer base in comparative 2020 PBT, while the company’s PAT soared 52.7 percent year on year to N220.3 billion from N144.2 billion in 2020.
Karl Toriola, chief executive of MTN Nigeria, commenting on the 9-months performance of the company said: “In the first nine months of 2021, we continued to enhance the resilience of the business, improve our performance and make good progress towards our ‘Ambition 2025’ strategy. Creating shared value has become a strategic priority within the ‘Ambition 2025’ framework.
“As a result, we continue to deepen our support for and partnerships in Nigeria. Our focus on deepening our partnerships has resulted in signing a five-year strategic partnership with the Nigerian Football Federation to become the official communications partner. We are excited about the potential to combine the power of our network and technology solutions with the passion that Nigerians have for football.
“Overall, service revenue continues to grow, increasing by 23.7 percent, ahead of the rate of inflation and supported by voice revenue growth of 10.6 percent and accelerated data revenue growth of 51.5 percent. In addition, our focus on cost management through our expense efficiency programme, combined with service revenue growth, led to a 1.6pp EBITDA margin expansion to 52.6 percent and translated into an increase of 51.9 percent in Profit Before Tax (PBT),” he stated.
Speaking on the outlook for the company for the last quarter of the year, Toriola said: “In the remainder of the year, we will build on the momentum from Q3 to deliver on our service revenue growth target. We remain focused on accelerating the expansion of our 4G coverage and rural connectivity programme while providing home broadband. Our network investments help us accelerate the growth of our platform businesses to unlock their full value. In addition, we will continue to sustain our expense efficiency programme to strengthen our financial position and support margins. At the same time, we strive to minimise the impact of foreign exchange availability on the business.”