Revenue of MTN Nigeria rose 13 percent in the nine month period of 2020, after the company sustained increased earnings in all its services business units – including data, voice, digital and fintech.
Total revenue of the telecoms provider, in the period, hit N975.8 billion, compared with the N856.5 billion raked in the same period of the previous year, analysis of its nine-month financial scorecard, available with the Nigerian Stock Exchange (NSE) shows.
The firm also saw a significant increase in customer base with an additional 3.9 million new customers into its network just in third quarter alone, bringing its total subscribers to 75 million.
Similarly, its data subscribers also increased by 37.7 percent to 30.7 million, up from 22.3 million data subscribers reported a year earlier, as more users opted for more data usage to keep in touch with families at the peak of the coronavirus pandemic.
MTN generates revenue from two main sources: Services, which comprises revenue from data, voice, fintech and digital; and other Services, made up of revenue from SMS, USSD, Information and Communication Technology (ICT) and infrastructure and devices.
While all four sub business units under services saw sustained revenues with the biggest revenue growth coming from the digital arm of the business, revenues from other services dipped marginally.
Revenue from voice calls increased to N654.5 billion, up by 4.2 percent from the N628.3 billion reported the same period last year.
Data revenue also increased by 57 percent to N241.6 billion while revenue from its digital and fintech businesses both increased by 114.3 percent and 28.3 percent to N6.7 billion and N32 billion, respectively.
MTN explained that the increase in digital revenue was driven by increased uptake of its enhanced digital offerings, supported by its over active base of 1.5 million users and partnerships with digital content providers.
However, while it saw increased revenue in the aforementioned businesses, revenue from other services dipped 13.1 percent to N36.8 billion compared to the N44.4 billion generated a year ago.
Expenses also climbed 19.5 percent from N400.1 billion to N477.96 billion, causing a 2.3-percentage point drop in earnings before interest, taxes, depreciation and amortisation (EBITDA) margin from 53.3 percent to 51 percent.
Its net finance cost for the period grew 32.9 percent to N95 billion from N71.8 billion in the nine months period, 2019, dragging down the increased growth recorded in its topline.
Pre-tax profit fell marginally by 0.6 percent to N211.6 billion from N212.9 billion reported last year. This was caused largely by the almost 33 percent increase in finance cost.
Similarly, profit after tax (PAT) fell by 3.3 percent, settling at N144.3 billion.
Commenting on the result, MTN Nigeria CEO, Ferdi Moolman, said the year 2020 had been a challenging one with the pandemic that started in the first quarter as well as the societal unrest across the country.
“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,” he said
However, despite the ups and downs, he explained that the firm had continued to recognise it must keep rising the best way it has to do, which is by staying 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 an ubiquitous and effective digital network,” he said.
According to Moolman, the firm, as part of the Covid-19 response, launched various initiatives to provide support for its people, customers and the various levels of government.
“We were pleased that over 75 percent 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 customers 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 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,” he said.
Going forward, MTN said it would continue to build on its financial and operational resilience and execute on its strategy to position the business for sustained growth over the medium and long term.
It said also that in the remaining quarter of the year, it would build on the momentum from Q3 to further expand 4G coverage and broaden rural connectivity. “This will be backed by its revamped acquisition offers, which will help to boost subscriber acquisition as well as support the continued growth in voice and data revenue.
“For our digital business, we will focus on growing the active base and building partnerships with digital content providers to stimulate increased adoption and usage of our services. Progress in MoMo money remains on track as we continue to expand the agent network and financial services offerings to drive adoption.”
The telco however identified the country’s exchange rate crisis as the major downside to this outlook, even as it strives to minimise its impact on the business.
“While the exchange rate impacts on our lease costs as it continues to put downward pressure on EBITDA into Q4, we will continue to drive service revenue growth and optimise our balance sheet to unlock efficiency and support margins.”
