MTN Nigeria Communications Plc (MTN Nigeria) has released its unaudited results for the half-year ended June 30, 2021, as well as plans to celebrate its 20th anniversary with numerous national impact projects.
Going by the published report, the telecom firm’s active data users declined by approximately 52,000 to 32.5 million. MTN mobile subscribers also declined by 7.6 million to 68.9 million, a position the mobile operator said was impacted by the regulatory restrictions on new SIM sales and activations. However, with the lifting of the ban on April 19, 2021 the company anticipates growth to normalise in the short-term as more of its acquisition centres are certified for SIM registration, although the initial run-rate of additions has been slower than usual due to new process requirements.
Service revenue however was up by 24.1% to N790.3 billion while earnings before interest, tax, depreciation, and amortisation (EBITDA) also grew by 27.6% to N417.2 billion. EBITDA margin improved by 1.4 percentage points (pp) to 52.7%.
The report further indicates that Capital Expenditure (CAPEX) was up by 39.1% to N186.4 billion (up 50.6% to N114.5 billion excluding right of use [RoU] assets).
The result was favourable to shareholders as dividend per share rose 30% at N4.55 kobo.
Commenting on the results, MTN Nigeria CEO Karl Toriola said: “In the first half of 2021, we made good progress strengthening the resilience of the business, managing the impact of the COVID-19 pandemic and enhancing support to our people, customers and other stakeholders.”
Over the half-year period, the company’s voice revenue grew by 13.1%, benefitting from an 11.8% increase in traffic and customer value management (CVM) initiatives. The impact on voice revenue from the industry-wide suspension of new SIM registration was partly offset by higher usage in MTN active SIM base as well as migration to a higher quality of experience.
Data revenue continued the positive momentum from H2 2020, rising by 48.3%. This was driven by increased usage from the existing base, supported by the acceleration in MTN Nigeria’s 4G rollout and enhanced network capacity following the acquisition and activation of additional 800MHz spectrum in Q1. Data traffic rose by 83.0% YoY, while smartphone penetration was up by 5.8pp to 49.3%. “Our 4G network now covers 65.1% of the population, up from 60.1% in December 2020.
Fintech revenue rose by 48.2%, driven by increased adoption of Xtratime and our core fintech services. “We continue to expand our MoMo agent network and broaden our service offerings. Our registered MoMo agents increased by 121,000 in H1 2021 to more than 515,000. Transaction volume increased by 280.8% YoY to 55.6 million in H1 2021, and our active subscriber base is now more than 6.1 million, up 180.0% YoY.”
Also the company’s digital business continued to gain traction on the back of a strong partner ecosystem driving digital revenue up by 61.8%. Over the period, active user base rose by 38.0% to over 3.9 million, led by Ayoba, MTN’s instant messaging platform with more than 2.3 million active users.
The enterprise business revenue also increased by 6.0%, demonstrating the continued recovery from the impact of the COVID-19 lockdown and the uptake of MTN Nigeria services by the businesses it serves. “We have made significant progress in concluding the operational modalities for the new pricing framework for USSD services, which incorporates the recovery of outstanding USSD debts.”
Further stating MTN’s commitments to the health sector, Toriola disclosed: “We extended our commitment to the Coalition Against Covid-19 (CACOVID) with an additional N3 billion contribution over a two-year period, half of which has already been paid. This is in support of efforts to promote the health and security of Nigerians, as we navigate our way through the pandemic; and in line with our Y’ello Hope initiatives through which we provided support to our broad base of stakeholders to the value of approximately N25 billion in 2020.”
He said the company’s progress towards achieving greater business resilience is reflected in the upgrade by Global Credit Ratings (GCR) of its national scale long-term issuer rating to AAA and affirmation of the national scale short-term rating of A1+ with a stable outlook. “This puts MTN Nigeria on the highest possible GCR scale for short-term and long-term ratings, providing a solid platform for growth.”
Following MTN Group’s stated intention to sell down up to 14% of its investment in MTN Nigeria, subject to market conditions over the medium-term, MTN Nigeria’s shareholders approved an equity shelf programme at the last Annual General Meeting. This will facilitate a process to increase ownership of the Company by more Nigerian retail and institutional investors.
Toriola assured that the company is forward-looking: “We will continue to sustain our expense efficiency programme to strengthen our financial position and support margins. In the remainder of the year, we anticipate that the base effects will partly influence our commercial and financial trends. Although the availability of foreign exchange remains a constraint, we strive to minimise its impact on the business.
We are driving a positive culture change across the organisation to enhance productivity and further improve performance. We maintain our strong focus on deeper, proactive and inclusive engagements to drive shared value for all stakeholders, while ensuring that our activities align with and contribute to the Government’s development agenda.”
With hopes of gradual economic recovery and going by the ongoing uncertainties presented by the new wave of the COVID-19 outbreak, along with the NIN registration exercise, MTN Nigeria remains mindful of changes to the operating environment as the rest of the year unfolds.
Also as the company clocks 20 years in Nigeria, it has revealed that it will, as part of celebrations, embark on road rehabilitations, rural network expansion and community services.
