MTN Nigeria reported a half-year revenues of N638 billion in 2020 compared to N566.9 billion reported same period last year. The 12.5% pop was driven by growth in data revenues in the first and second quarters of the year.
The company reported a 49% growth in data revenues in the second quarter of 2020 as its Nigerian customers guzzled more data in the ensuing Covid-19 economic shutdown.
The revenues reported in the first half of 2020 now translate to about N100 billion monthly in revenues, a company and Nigerian Stock Market record, according to Nairametrics Research. Revenues averaged N97 billion monthly in 2019 and N86.5 billion in 2018.
- In the second quarter of 2020 total revenues rose 8.5% to N308.9 billion driven largely by higher data revenues.
- Data revenues jumped from N56.7 billion to N79.9 billion in the quarter under review confirming the growing reliance Nigerians have on data for communication.
- Call revenues, the company’s mainstay suffered a 1% drop to N176.2 billion suggesting a drop in its average revenue per user. Call revenues make up about 68% of its service revenues. Mobile subscriber growth was just 3.8% in the quarter.
- Revenues from its Fintech division fell 7.7% to N10.2 billion in the quarter. It however rose by 29.6% in the first half of 2020 compared to the year before.
- MTN has aggressively pushed its Fintech business leveraging on its economies of scale to gobble market share.
- Pre-tax Profits for the quarter was N62.2 billion down 13.4% YoY.
- Earnings per share N2.11/N2.4 15.6% up QoQ. The earnings per share dip was due to higher operating expenses
- The company explains the growth in data revenue was driven by growth in data usage and traffic. The company added 2 million new data subscribers in the quarter compared to 1.8 million in the first quarter.
- The company also explained that data traffic rose 27.2% QoQ (141.2% YoY) while usage measured in megabyte per user rose 23.3% QoQ (76% YoY).
- MTN also claims it brought in 4 million new smartphones in the first half of 2020.
- In its Fintech division, the company explained its growth was driven by its airtime lending service and expansion in its agent network.
- Its total number of registered agents is now 220,000 while total transaction volume has risen to 14.6 million driven by its 2.2 million-plus subscribers.
- MTN also complained that port congestion and scarcity of foreign exchange rate affected its capital expenditure plans, especially in the first half of the year.
- Capital expenditure for the quarter was N47.5 billion compared to N40 billion same period in 2020. However, on a half-year basis, capital expenditure is down 21% to N76 billion.
MTN post N385.3 billion in revenues in 3 months as Nigerians guzzle data
MTN posted revenue of N385.3 billion representing a 17% increase from the N329.1 billion reported in the same period in 2020.
Nigeria’s largest telecoms network, MTN posted revenue of N385.3 billion representing a 17% increase from the N329.1 billion reported in the same period in 2020.
The double-digit growth is happening at a time when Nigerians have put the Covid-19 lockdown behind them and returned fully to work across the country. It is also happening on the back of tumultuous three months of SIM card registration bans and government mandates for all Nigerians to register to obtain their NIN and link the numbers to their SIM Cards.
MTN reported an 8% growth in Voice related revenue topping N208 billion for the period under review. Data revenue continued to lead revenue growth printing at N105.7 billion, a 42.6% growth year on year, showing heavy reliance on data by MTN’s 61.5 million internet subscribers, the highest in the country.
MTN commands the market share for internet subscriptions owning about 42% of the market. MTN also controls 40% of the Voice market share, the highest compared to any other competitor.
Commenting on the result, MTN’s CEO, Karl Toriola explained that “the effects of customer churn and the restrictions on new SIM sales and activations arising from changes in SIM registration regulations” had resulted in a decline of its subscriber base. This reduction led to a marginal drop of 71,000 in Q1 active data subscribers to 32.5 million but this did not affect growth. Rather they recorded an 86.7% increase in data traffic and a 48.5% increase in usage (MB per user) from the existing base.
Toriola explained that “the improvement in data services was supported by the completion of our acquisition and activation of an additional 800MHz spectrum” enabled the company to further increase traffic by 10% and enhance throughput by 79%.
MTN also doubled its revenue from Digital business rising to N3.7 billion during the quarter while FinTech related revenue rose 28.5% to N14.6 billion.
“Digital revenue grew by 101.0% and fintech revenue by 28.5% as customers continued to adopt more digital products and services, a trend accelerated by the pandemic. As of the end of March 2021, we had 449,100 registered MoMo agents and 4.6 million fintech customers.”
MTN also revealed it was being owed N40.3 billion by deposit money banks (DMBs) on services provided for under its USSD product. MTN did not recognize any revenue for its USSD business resulting in a flat year-on-year revenue for its enterprise business.
What next for MTN?
The GSM behemoth maintains it will continue to pursue double-digit revenue growth in 2021 through its 4G network expansion and positioning its FinTech Business for “accelerated growth” to unlock its full potential.
MTN also revealed it will continue to push for a revised commission paid to banks on its air time sales and is exploring other options of selling its airtime outside of banks.
“We will continue to sustain our expense efficiency programme to strengthen our financial position and support margins. We remain in dialogue with the DMBs on a pricing option for airtime sales commission while diversifying our airtime recharge channels to offer our subscribers more options to purchase airtime and stay connected.”
Dangote Cement incurs N97 billion taxes in 2020
The cement giant incurred its taxes on record.
One of Nigeria’s largest indigenous companies and the largest by market capitalization incurred a company income tax of N97 billion for the financial year ended December 2020.
This s according to the information contained in its full-year audited financial statements for the period under review.
Why this matters?
Dangote Cement has enjoyed Pioneer Status over the years and has often been criticized for not paying enough taxes despite its mega-profits.
- The N97 billion incurred in 2020 is the highest company income tax reported by Dangote Cement since it became listed on the Nigerian Stock Exchange.
- It incurred N49 billion in taxes in 2019 and got a tax credit of N89.5 billion in 2018.
- Despite incurring N97 billion in taxes during the year, Dangote Cement’s actual tax paid was just N20.9 billion in 2020 compared to N4.6 billion paid a year earlier.
- Tax incurred in the profit and loss statement is an accounting provision and is not always the actual tax paid in cash.
- Putting it into context, the dividend paid during the year is N272 billion and interest payments to its creditors totals N48.2 billion.
Improved Cement Revenues
Despite the Covid-19 Pandemic, the Cement Giant reported full-year revenue of N1 trillion, the highest it has ever recorded since it was privatized almost 20 years ago. The company also reported a profit before tax of N373.3 billion only and a profit after tax of N276 billion, its highest since 2018.
Nigeria like most countries in the world has faced a challenging 2020 due to the impact of Covid-19 on the economy, especially the private sector. However, mega-corporations like Dangote Cement appear to have even performed better during the year. The cement industry in general also appears to have performed well during the year as the combined revenue of the top 3, Dangote Cement, Lafarge, and BUA rose to N1.47 trillion from N1.28 trillion.
The impressive result nonetheless, Dangote Cement’s margins remained strong during the year posting a gross profit margin of 57% in line with its 3-year averages. However, the higher taxes incurred in 2020 dropped profit margins to 26.7%. When compared to 2018 when it still enjoyed Pioneer status, the company posted profit margins of about 43%.
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