Data is powering MTN Nigeria’s revenues to new highs in the country even as the company affirms its plans to list on the Nigerian Stock Exchange (NSE) before the end of 2018.
In the half year interim released by the company yesterday, MTN announced that the number of new subscribers on its network increased by 2.9 million in the six-month period ending June 2018 to close at 55.2 million, accounting for approximately 25 percent of global subscriber base of 223 million as at June 2018.
However, the number of active data users on the company’s platform rose by 800,000 to 14.9 million. While the company’s data revenue rose by 63.7 percent within the period, voice revenues was up only by 17.3 percent, an indication that data revenues is now the main strength of the company’s growth in the country.
Data traffic on its network also rose by 52 percent in the six-month period end June 2018. Active data users on the MTN Group stood at 71 million as at June with Nigeria now accounting for approximately 21 percent of the its global active data users, second only to Iran which accounts for 27 percent.
The MTN half year report also shows that the company is increasingly getting involved in the Mobile Money market with MTN Mobile Money which is now active in 14 different countries.
Called “MoMo” MTN reports that its mobile money platform now has 24 million active users in its 14 operational countries with US$6 billion transactions every month. Ghana (33 percent) and Uganda (22 percent) are its biggest markets with Nigeria accounting for just nine percent of MTN Mobile money market despite the fact that the country has the MTN Group’s biggest subscriber base.
For the half year ended June 2018, MTN Nigeria reported total revenues of 21 billion rand or (N567 billion), up 17 percent.
The company also reported Earnings Before Interest, Taxation, Depreciation and Amortization (EBITDA) of 9.09 billion of N246 billion with an EBITDA margin of 43 percent up from 38.3 percent in June 2017.
MTN Nigeria yesterday reiterated that it expects to list on the Nigerian Stock Exchange before the end of 2018, subject to regulatory approvals and appropriate market conditions. The MTN Group expects that any reduction in its ownership of MTN Nigeria will be limited.
“We made good progress on our plans to list MTN Nigeria on the Nigerian Stock Exchange. We do not expect any material cash inflows to the group from the IPO,” MTN Group president and CEO, Rob Shuter said during an investor’s conference call for H1 2018 financial results.
“We resolved some key regulatory issues in Cameroon and Benin, launched the initial public offering (IPO) of MTN Ghana and made progress on the IPO of MTN Nigeria. As part of our on-going portfolio review.”
In first half of 2018, MTN Group reported revenue of 62.8 billion Rand (N1.7 trillion), while Service revenue increased by 10.2 percent, supported by growth in MTN Nigeria which was up 17 percent while MTN Ghana increased by 27.9 percent, MTN South Africa increased by 2.9 percent and MTN Uganda increased by 8.8 percent.
“MTN had an encouraging first half of 2018, with acceleration in the second quarter, supported by an improved operational performance across many markets which were led by Nigeria, Ghana and South Africa,” Shuter said.
MTN Nigeria performed ahead of expectations, with double-digit growth in voice revenue driving accelerated service revenue growth and the further widening of the EBITDA margin with increased usage and growth in data subscribers supported data revenue growth; however Digital revenue declined as a result of further optimisation of its VAS business.
“Towards the end of the second quarter, net additions and revenue growth slowed in line with economic activity, as well as some seasonality,” MTN Group said.
“We expect this trend to continue in the third quarter, with an improved performance expected in the fourth quarter as MTN Nigeria subscriber base expanded by 5.6 percent from December 2017 to 55.2 million.” Despite sanctions imposed on Tehran by the United States this week which already led to banks and many companies around the world divesting from Iran, MTN Group also said it is sticking to its 2018 dividend target by continuing operations in Iran.
“Despite continued challenges in repatriating funds from MTN Irancell, the board remains committed to plans to declare a total dividend of 500 cents per share for 2018 and is targeting growth of 10 percent to 20 percent over the medium term,” MTN Group said.
On Tuesday, President Donald Trump said companies doing business with Iran would be barred from the United States although he noted that the sanctions may limit the ability of the group to repatriate cash from MTN Irancell, including future dividends.
“We believe everyone deserves the benefits of a modern connected life and see opportunity to provide this. We are confident that MTN remains well placed to deliver on our medium-term guidance,” MTN Group said.
The recent announcement from MTN that it had signed an agreement to sell Cyprus telecoms to Monaco telecoms, should be realised in the next financial quarter. The net sale amount is set at €260m and is to be paid in cash up front. The deal is part of MTN’s decision to focus exclusively on its operations in Africa and the Middle East. Monaco Telecom (the purchaser) will be allowed to use the MTN brand for another 3 years for a commercial fee.
