MTN Nigeria has released its unaudited results for the first quarter (Q1) of 2019, ended March 31.
The company in Q1 delivered improved results, as the telco’s service revenue increased by 13.4 percent on the back of improved voice and data services and its earnings before taxes, depreciation and amortization (EBITDA) margins also grew to 53.3 percent, up 2.4 percentage points year on year, as a result of revenue growth and effective cost management.
MTN Nigeria also increased its data revenue by 32.4 percent, Fintech revenue by 22.9 percent, voice revenue by 12.7 percent and service revenue by 13.4 percent.
MTN Nigeria recorded significant revenue increase in service – voice and data – as the telco added 2.1 million subscribers to its network in Q1 2019 to get a total of 60.3 million subscribers in Nigeria.
Growth in data revenue was supported by a 10.6 percentage point increase in smartphone penetration, improved network quality and a 9.1 percent increase in active data subscribers to 20.4 million. Total subscribers increased by 3.6 percent quarter on quarter (QoQ) to 60.3 million.
Although its digital revenue decreased by 68 percent, analysts say that the telco is likely to see a pickup in digital revenues driven by mobile financial services, once the company is granted its payment service banking (PSB) licence by Central Bank of Nigeria.
In 2019, MTN Nigeria adopted the IFRS 16 accounting standards in line with global best practice and adjustments are reflected in the results.
“Our first quarter performance was in line with expectations, as service revenue remained resilient with double-digit growth on the back of improvements in voice and data revenues,” said Ferdi Moolman, CEO, MTN Nigeria, commenting on the results.
“We connected a further 2.1 million people to our network, providing them access to worldwide communication services, while additional 1.7 million people are able to access the possibilities that the internet provides. This growth is built on our focus on customer-centric delivery and in particular on improved customer retention, our continuous focus on value-for-money propositions and further network roll-out and enhancement,” Moolman said.
“Q1 2019 saw a significant increase in our capital expenditure programme, with focus on LTE services, where we rolled out 1,188 sites across our key focus cities. In addition, the successful transfer of our 800MHz spectrum from Visafone to MTN Nigeria will further enable improvements to network coverage and service quality,” he said.
Moolman said the telco had made significant progress to list on the Nigerian Stock Exchange (NSE) following the conversion of MTN Nigeria to a public company and the successful registration of its ordinary shares with the Securities and Exchange Commission (SEC), adding that it is now engaging with the NSE to complete the listing process.
“The business is on a sustainable growth path with service revenue increasing by 13.4 percent year-on-year (YoY), in line with our medium-term guidance of double-digit growth. This was led by a 32.4 percent increase in data revenue and a 12.7 percent increase in voice revenue. A general slowdown in economic activities during the election period impacted voice revenue growth,” the company said in a statement.
Early in the second quarter, MTN’s e-commerce joint venture, Jumia Technologies AG, successfully raised fresh capital and listed on the New York Stock Exchange, resulting in a dilution of MTN’s shareholding from 29.7 percent to 18.9 percent. This investment is now valued at approximately $560 million as at May 6, 2019, according to MTN.
Jumoke Akiyode-Lawanson
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