Th e Nigerian unit of South African telecommunications company, MTNN, looks set to break a record it set last year for being the first public company to post revenues in excess of a trillion naira.
According to half year numbers published by the Telco on Friday, revenues hit N566.95 billion in the first half of 2019, up 12 percent compared to last year.
Going by the half year trend, MTNN is on course to do N1.14 trillion in revenues by year-end, 9.6 percent higher than the N1.04 trillion recorded in the whole of 2018.
Despite the positives to take away from a Nigerian company posting trillion naira revenues back to back, a single digit revenue growth is hardly anything to cheer in a country with double digit inflation rate, as it is a sign of a weak economy and shrinking consumer disposable income.
The revenue growth was driven by a 31.7 percent jump in data revenue and 21.2 percent increase in fintech revenue. Voice revenue also recorded growth, following an 11.4% rise compared to last year.
Shares of MTNN were up 1.6 percent on Friday to N127 per unit, as investors cheered what was largely impressive half year performance by the Telco.
The telco’s subscriber base was also up 5.7 percent year to date to 61.5 million while active data subscribers increased by 11.0% to 20.7 million.
An increase in smartphone penetration to 39.2% from 37.1% also contributed to the company’s higher revenue. On the cost side, MTNN maintained its cost efficiency as the EBITDA margin came in at 53.8% in H1-19, which was ahead of consensus analysts’ estimate.
Direct network operating costs were down by 21.1 percent in the first half With costs largely trending downward, profit before tax in the first half of the year came in at N141.80 billion, a 31 percent increase compared to the same period last year.
Profit before tax printed lower than expected as in the back of a N200 billion debt secured by the Telco in the second quarter of 2019. Interest expense rose by 45.8 in the period under
review, driven by the additional debt. Gross debt rose by 68.3 percent year to date 19 as against N251.79 billion as at Q1-19.
Profit after tax rose by 34.8 percent to N98.93 billion in the first half period under review. Since publishing its financial scorecard for the MTNN has announced an interim dividend of N2.90/ share, which implies a yield of 2.3 percent.
Shares of the telco has gained 28.28 percent since it listed at N90 per share on the NSE.
