MTN Group Limited, the parent company of MTN Nigeria, has released its financial result for the first quarter period ended March 31st, 2019.
The result shows a generally impressive performance across the company’s markets in Africa and the Middle East, with a 10.0% increase in the Group’s total operating revenue; year on year.
Focus on MTN Nigeria’s performance: As expected, focus is on MTN Group‘s biggest market (i.e., MTN Nigeria), which witnessed a 13.4% increase in service revenue, year on year. The subsidiary’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins also increased by 53.3%.
According to the financial report which was obtained by Nairametrics, the company’s reported performance from Nigeria is “in line with our medium-term guidance of double-digit growth.”
While reacting to MTN Nigeria‘s Q1 EBITDA increase of 53.3%, an Equity Sales Manager with Stanbic IBTC Stockbrokers, Mr Akinbamidele Akintola, said:
“What a beautiful business! Just focus on the 53.3% EBITDA Margin; it ranks up there with Dangote Cement Plc.”
Important indicators from the report
- Group subscribers increased quarter-on-quarter (QoQ) by 4.0 million to 236.6 million
- Active data subscribers increased QoQ by 2.6 million to 81,3 million
- Active MTN Mobile Money customers increased QoQ by 1.2 million to 28.3 million
- Group service revenue increased year-on-year (YoY) by 10.0%
- MTN South Africa service revenue increased YoY by 4.6% with earnings before
interest, tax and depreciation (EBITDA) margin of 38.8% (35.3%) - MTN Nigeria service revenue increased YoY by 13.4% with an EBITDA margin of
53.3% (44.2%) - Reported growth rates for both service revenue and EBITDA were higher than
constant currency rates
What influenced MTN Nigeria’s impressive performance? According to the financial report, the Nigerian performance was influenced by a 32.4% increase in revenue realised from data sales, as well as a 12.7% increase in voice revenue. What this shows is that the company’s Nigerian customers spent more money buying data than they did making phone calls.
“This was led by a 32.4% increase in data revenue and a 12.7% increase in voice revenue. A general slowdown in economic activities during the election period impacted voice revenue growth. Growth in data revenue was supported by an increase in smartphone penetration, improved network quality and a 9.1% increase QoQ in active data subscribers to 20.4 million. Total subscribers increased by 3.6% QoQ to 60.3 million. MTN Nigeria reported an EBITDA margin of 53.3%. On an IAS 17 basis the margin increased to 44.2%, up 2,4 percentage points YoY, driven by the growth in revenue and effective cost management.”
Group CEO’s comment: While commenting on the overall group performance, MTN Group‘s Chief Executive Office, Rob Shuter, said the overall growth in revenue was made possible by expansion in voice, data, and fintech.
“The growth in service revenue was supported by the continued expansion in voice, data and fintech revenue. Outgoing voice revenue increased by 5.9%, data revenue increased by 18.3% and fintech revenue increased by 30.6%. Digital revenue declined by 45.4%, impacted by the work that continues around optimising our value added services business. Currency markets were favourable in the quarter, resulting in reported service revenue
growth higher than constant currency rates.”
Recall that a recent report by Nairametrics had it that MTN Nigeria remains the leader in the Nigerian telecoms industry. As at February 2019, the company recorded the highest number of mobile internet subscribers. MTN‘s subscriber base increased by 41% to 46.5 million. We also reported that MTN Nigeria has finally completed the registration of 20.345 billion ordinary shares of N0.02 each with the Securities and Exchange Commission.
Upshots: This result is a major booster for MTN’s planned listing on the Nigerian Stock Exchange. Retail investor interest in the stock exchange is also expected to rise and most stock brokerage firms should be on the line to earn significant fees from the volumes of trade this listing could provide.