MTN Nigeria Records Solid Growth In Profit After Tax Despite Fall In Mobile Subscribers

MTN Nigeria grew its revenue by 23% for the nine months ended September 2021 despite the fall in mobile subscribers during the period which was caused by regulatory restrictions on new SIM sales and activations.

The telecommunications giant disclosed in its unaudited financial statement released on Friday.

Revenue grew from N975.7 Billion in 2020 to N1.2 Trillion in 2021. This was driven by Voice revenue which jumped from N558.7 Billion in 2020 to N610.2 Billion in 2021. Data revenue rose from N241.6 Billion in 2020 to N366.2 Billion in 2021. SMS revenue saw a massive increase from N8.3 Billion in 2020 to N33.3 Billion in 2021. Digital revenue was the only revenue line to record a decrease, digital revenue decreased from N26.3 Billion in 2020 to N12 Billion in 2021.

The full highlights are:

Mobile subscribers declined by 7.5 million to 67.5 million, impacted by the regulatory restrictions on new SIM sales and activations

• Active data users increased by 2.5 million to 33.2 million
• Service revenue was up by 23.7% to N1,204.4 billion
• Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 27.4% to N634.5 billion
• EBITDA margin improved by 1.6 percentage points (pp) to 52.6%
• Capital expenditure was up by 34.4% to N261.1 billion (up 27.9% to N166.5 billion excluding the right of use [RoU] assets)
• Earnings per share of N10.8 kobo, up 52.7%

MTN Nigeria CEO Karl Toriola comments: “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.”

“We have also partnered with the Ministry of Industry, Trade, and Investment to participate in and support the 2021 US-Nigeria Investment Summit in September. The partnership was in recognition of our role as a successful model for foreign direct investment in Nigeria. In view of our intention to participate in restoring and refurbishing the Enugu-Onitsha Expressway under the Road Infrastructure Tax Credit (RITC) scheme, we continue to engage with the relevant parties to actualize the project. Towards the end of the quarter, our network was restricted in some locations, in line with the directives of relevant authorities and in compliance with our licence conditions, to address security issues in those areas. This has slightly affected some of our business activities.”

“In addition, we had an outage on 9 October 2021 that left customers without a network connection. We have compensated our customers and put measures in place to continuously provide quality services to our customers. The resilience we are building in the business is reflected in our performance, demonstrating our ability to achieve continued growth despite the ongoing impact of SIM registration and activation restrictions on subscriber growth. While our overall subscriber numbers have continued to decline over the last quarter, this has been at a reduced rate, and we have seen our data subscriber numbers return to growth, increasing by 2.5 million. We expect the decline in the overall subscriber base to bottom out and return to positive net additions in Q4 2021 as we progressively ramp up our SIM registration and activation infrastructure while adopting and aligning with the new regulations.”

“Overall, service revenue continues to grow, increasing by 23.7%, ahead of the rate of inflation and supported by voice revenue growth of 10.6% and accelerated data revenue growth of 51.5%. 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% and translated into an increase of 51.9% in Profit Before Tax (PBT).”