MTN Nigeria Q3 pretax profit declines by 0.6% to N211.6bn

MTN Nigeria today announced its unaudited results for the nine months (9M) ended September 30, 2020.

Key metrics:

Mobile subscribers increased by 3.9 million to 75.0 million; active data users increased 7 million to 30.7million; service revenue increased by 13.9percent to N973.8 billion; earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 9.1percent to N497.9 billion; EBITDA margin declined by 2.3 percentage points (pp) to 51percent; profit before tax (PBT) declined by 0.6percent to N211.6 billion; earnings per share (EPS) declined by 3.3percent to 7.1kobo.

MTN Nigeria CEO, Ferdi Moolman comments: “The year 2020 has been challenging for everyone. The CO\/ID-19 pandemic was first reported in Nigeria during the first quarter of 2020 and the country has, to date, registered over 62,000 cases and over 1,100 deaths according to the Nigeria Centre for Disease Control (NCDC). Many share a common distressing story of health, social and financial consequences of the pandemic. The recent agitations across the country are of further concern and our thoughts and prayers are with all those directly and indirectly affected.

“Through all these, we recognise that we must keep rising the best way we have learnt to do, which is together. That is why our priorities have remained focused on continuing to provide and invest in a network that brings people together and provides a platform for everyone’s voice to be heard. It also enables the accelerated need for digitalisation where more people work from home with increasing reliance on a ubiquitous and effective digital network.”

“As part of our COVID-19 response, we launched various initiatives to provide support for our people, customers and the various levels of government. We were pleased that over 75percent of our customers benefited from the free SMS under our Y’ello Hope package aimed mainly at the vulnerable in the society. This initiative enabled our customer’s to send over 4.3 billion messages and stay connected to family and friends in the midst of social distancing imperatives, mindful that all hands must be on deck to stem the pandemic. When we deployed our Wear-it- for-me campaign, we leveraged on the power of community and the family ties that bind us, to help create awareness around wearing masks, again as part of Y’ello Hope.

“Continuing our national support in relation to the disruptive effect of the pandemic, we launched The MTN Revv Programme in August to expand our support for small and medium enterprises (SMEs) across the country. The programme is designed to help SMEs reposition their businesses for growth in the emerging digital economy, and includes masterclasses, advisory services, marketing and technology support. The first phase, which is the masterclass, has engaged more from 18,000 SME participants so far. Based on the popularity of the programme, we now plan to hold it annually”, Moolman.

“We are humbled that MTN Nigeria was named the ‘Most Responsive Organisation to COVID-19 at the 2020 Nigerian Risk Awards. This is a reflection of our commitment to the initiatives we implemented in response to the pandemic. We will continue to provide support as the country navigates the pandemic and its associated impact.

During the period under review, we saw volatility in both voice and data revenue, affecting the trajectory of our overall service revenue, as well as pressure on costs, which continues to impact our operating margins, dampening profitability.

Following a decline in voice traffic and an acceleration in data during lockdowns in Q2, we have seen a normalisation of traffic as restrictions have been removed, with a recovery in voice traffic and continued growth in Data. This has supported a 13.9percent growth in service revenue, with an acceleration of growth to 16.5percent in Q3 specifically.

Data revenue rose by 57percent, with an increase in data usage and traffic. Revenue from digital and fintech services rose by 114.3percent and 28.3percent respectively, while voice revenue growth was 4.2percent.”