MTN Nigeria, South Africa drove Group’s revenue to 2-year high in H1
…as telecom unit joins MSCIN standard index
…posts 7.74% rise in PAT
First-half 2019 revenue for MTN Group jumped 15.48 percent on the back of a joint 62 percent contribution from Nigeria and South Africa.
The Johannesburg-based mobile-phone company reported a revenue surge by R9.8 billion from R62.78 billion it earned in the first six months of 2018, to R72.50 billion in the corresponding period 2019. This represents the group’s highest first-half revenue since the R79 billion in H1 2016.
“We had a good first half, reporting solid financial results, good commercial momentum and encouraging strategic progress,” Rob Shuter, MTN Group President and CEO, said.
“We saw a growth of 12% in adjusted headline earnings per share, which is the first time that we have delivered growth in this measure in recent years. Our service revenue grew just below 10% and EBITDA just above 10%, both on a constant currency basis,” he added.
This is as MTN Nigeria has been added to the MSCI Nigeria Standard Index and therefore MSCI frontier. With this new addition, MTN Nigeria now joins nine other Nigerian companies on the index.
The telecom giant will be 0.8percent of MSCI frontier and 12.9percent of MSCI Nigeria (standard index)
The MSCI Nigeria Index is designed to measure the performance of the large and mid-cap segments of the Nigerian market. With 9constituents, the index covers approximately 85% of the Nigerian equity universe.
In the period under review, MTN Nigeria reported revenue growth of 29.54 percent from R17.23 billion in H1 2018 to R22.32 billion in H1 2019, while MTN South Africa recorded a 5.81 percent increase in the same period. Thus, both units contributed 30.66 percent and 30.89 percent respectively.
With an 8.95 percent revenue contribution, MTN Ghana reported a 16.94 percent growth in its revenue from R5.55 billion in H1 2018 to R6.49 billion in the corresponding period of 2019.
A dive into the H1 financials of the telecommunication company revealed that the group earned most of its revenue from Network services. This contributed R52.43 billion to its revenue from the R45.24 billion it reported a year before. Revenue from interconnection and roaming at R7 billion in H1 2019 was the next highest source of revenue. This was closely followed by Network services.
Within the six-month period, MTN posted profit after tax (PAT) of R5.29 billion, a 7.74 percent growth from the R4.91 billion it recorded in the corresponding period of 2018. However, the company’s net finance costs were up 92.7 percent from R3.67 billion in 2018 to R7.08 billion in H1 2019
The African telecommunication giant said its earnings before interests, taxes, depreciation and amortization rose 10 percent.
According to the figures, MTN grew its subscriber base by 7.7 million in the first six months of the year to reach a total of 240 million subscribers. Also, the number of active data users grew by 3.5 million to 82 million and its 30-day active Mobile Money users grew by 2.4 million to 30 million.
“Our continued focus on the customer experience has seen us record brand NPS’ leadership across more than 50percent of the portfolio, with 12 markets now leading. That contributed to MTN being named the most valuable South African brand in the Brand Finance South Africa 50 report and the most admired African brand by Brand Africa 100,” Shuter said.
MTN is now about six months into a plan to raise about R15 billion ($1 billion) from disposals to help pay down debt, which increased to R70.1 billion in the first half. The carrier is also seeking to add Ethiopia to its 21 markets, with a potential auction to new licences to take place by next year.
Meanwhile, MTN Nigeria was last month granted a super-agent licence by the Central Bank of Nigeria (CBN) to enable the industry player join forces with other financial technology companies to deepen financial inclusion in the country which has one of the highest exclusion rates in the continent.
The move by the Telco to set up a Finetch subsidiary is in line with plans to acquire a licence to operate as a Payment Service Bank (PSB). According to industry sources, the Y’ello Digital Financial Service is part of the Central Bank of Nigeria’s requirements for obtaining a PSB licence.
Recall, MTN, along with Airtel, Globacom, 9mobile and ntel, had pledged to deepen financial inclusion in 30 months by collectively reaching 90 million Nigerians through the deployment of over one million airtime agents as mobile money agents.
As at 2 pm West African Time, the share price of MTN Nigeria rallied 3.66 percent to trade at N133 on Thursday.