• Friday, March 29, 2024
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Dangote Cement, MTN, Airtel set to beat 2021 revenue target

Stakeholders rate Dangote Cement best in Africa

Dangote Cement, MTN Nigeria and Airtel Africa, three of Nigeria’s largest companies by market value, are on course to surpass their internal earnings forecast in 2021, thanks to a stronger-than-expected performance in the first nine months of the year.

Dangote Cement surpassed the N1 trillion revenue mark in the first nine months of 2021, the shortest period it has ever done so, and is now a short crawl away from equalling the total revenues made in 2020.

Thanks to higher demand for cement, Nigeria’s largest producer of building material recorded N1.02 trillion in revenue in the first nine months of 2021.

It means Dangote Cement needs to make sales worth only N100 million in the three months through December to match its total revenue of N1.03 trillion in the whole of 2020. That is less than 0.5 percent of the N340 billion average quarterly revenue the company has reported this year.

“Looking at the data, Dangote Cement and MTN Nigeria look nailed on to post record revenues in 2021 and beat their earnings forecast,” Tajudeen Ibrahim, head of research at Lagos-based investment bank, Chapel Hill Denham, says in a response to questions.

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Dangote Cement’s revenue in the nine-month period was 34.2 percent higher compared with last year’s N761 billion. The cement maker’s profit jumped 33.6 percent to N278 billion in the said period from N208 billion last year.

MTN Nigeria is also on course to beat last year’s performance and eclipse its target for 2021 with revenue of N1.206 trillion in the first nine months, which is only N144 billion away from last year’s total revenues of N1.35 trillion.

The N144 billion MTN Nigeria needs in the fourth quarter to equal 2020’s total revenue is less than half of its quarterly average revenue this year of N340 billion.

In the fourth quarter of 2020, MTN Nigeria reported revenues of N370 billion, which is higher than last year’s average, as revenue for telcos tends to be higher in the fourth quarter due to the festivities. Any improvement on the revenue made in 2020 will be enough to see the telecom giant surpass its target for 2021.

“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,” Karl Toriola, MTN’s CEO says.

“In the remainder of the year, we will build on the momentum from Q3 to deliver on our service revenue growth target,” Toriola states further.

MTN’s revenue in the nine-month period represents a 23.6 percent increase compared with the N975 billion recorded in 2020, while profit after tax jumped by 52 percent to N220 billion from N144 billion.

Active data users increased by 2.5 million to 33.2 million while service revenue was up by 23.7 percent to N1.204 trillion. Voice revenue was the biggest revenue driver in the period, climbing 10 percent to N722 billion.

Data was the second biggest driver of revenue with N366 billion, a 51.5 percent increase from last year. Fintech revenue grew 55 percent from last year to contribute N50.2 billion to the total revenue pool while Digital revenue was up 56 percent to N12 billion.

Meanwhile, other service revenue rose 38 percent to N53 billion, the third largest revenue source. Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 27.4 percent to N634.5 billion.

Airtel Africa is also ahead of its 2021 target. The telco saw its profit jump the most of the three firms analysed by BusinessDay, with a 131.6 percent increase to $335 million in the half year ended September 2021, from $145 million in the same period of 2020.

Revenue grew by 27.6 percent to $2.27 billion compared with $1.8 billion the previous year.

“Our first half financial performance has been strong,” Segun Ogunsanya, Airtel Africa’s chief executive officer, states.

“The first half of last year, and especially Q1, was impacted by the start of COVID, but even after adjusting for these effects, our revenue growth rates for the half year for the Group and all our service segments are ahead of our FY’21 revenue growth trends, and in reported terms these are all in strong double digits,” Ogunsanya says.

There was double-digit growth across all the regions Airtel Africa operates in the first half of 2021 ended September (Airtel has a unique calendar).

Airterl Nigeria reported revenues of $896 million, a 32.4 percent increase compared with last year. East Africa revenue was up 25.8 percent and Francophone Africa up 22.1 percent. Double-digit growth also applied for all key services, with Voice up 19.7 percent, Data up 36.9 percent and Mobile Money up 42.0 percent, according to the company’s financial statement.

Nigerian companies are enjoying a strong rebound from the pandemic-ravaged 2020, when revenues slumped to record lows.

For the three companies (Airtel, MTN and Dangote Cement) however, the impact of the pandemic was not as pronounced as in other sectors, so they are not coming from as low a base as several other companies.

This highlights the resilience of the three businesses amid trying times.