MTN Records Increased Revenue, Reduced Voice, Data Subscribers in Q1

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MTN Nigeria Communications Plc, yesterday, released its
unaudited results for the quarter ended 31 March 2021.

According to the report of the results, its mobile subscribers
declined by 5 million to 71.5 million due to the effects of
customer churn and the regulatory restrictions on new SIM sales and
activations.

The telelecoms company’s active data users also declined
marginally by 71,000 to 32.5 million.

However, its service revenue increased by 17.2 per cent to
N385.2 billion, while

Earnings Before Interest, Tax, Depreciation, and Amortisation
(EBITDA) grew by 19.1 per cent to N204.5 billion.

EBITDA margin increased by 0.9 percentage points to 53.1 per
cent. Capital expenditure was up by 19.3 per cent to N89.9 billion,
up 27.8 per cent to N31.6 billion excluding right of use (RoU)
assets.

The result showed that profit before tax grew by 33.9 per cebt
to N102.9 billion, while earnings per share rose by 42.5 per cent
to N3.60 kobo.

According to the report, “Operationally, service revenue in Q1
grew by 17.2 per cent year on year (YoY), in line with our
medium-term target, supported by growth of 42.6per cent and 8.0 per
cent in data and voice revenue respectively.

“This was achieved despite the impact of the pandemic and a
decline in our subscriber base due to the effects of customer churn
and the restrictions on new SIM sales and activations arising from
changes in SIM registration regulations. We continue to collaborate
with the Nigerian Communications Commission (NCC) and the Nigerian
Identity Management Commission (NIMC) to update subscriber records
with the National Identity Number (NIN).”

Commenting on the report, MTN Nigeria CEO, Karl Toriola, said:
“We made good progress in the first quarter of 2021 despite the
continued impact of the COVID-19 pandemic. We continue to
prioritise the safeguards put in place to protect the health and
well-being of our people, customers and stakeholders and to control
the spread of the virus while ensuring network resilience and
efficiency.

“As part of our Y’ello Hope initiatives, we continue to support
Government’s efforts in combatting the COVID-19 pandemic. We
supported the most vulnerable in our communities, providing them
with free-to-access services (including SMS and data) as well as
essential medical supplies (tests and personal protective
equipment).

“We continue to support the Coalition Against COVID-19 (CACOVID)
that has driven multiple initiatives, such as building isolation
centres across the country. MTN Nigeria also paid taxes early in
support of Government’s ongoing efforts. In addition, our REVV
support programme for Micro, Small and Medium Enterprises (MSME)
helps them navigate the new digital reality.”

Toriola said MTN Nigeria would continue to actively support the
federal government’s NIN enrolment programme, with 182 points of
enrolment active across the country, noting, “We are working with
NIMC to increase the enrolment centres to provide an access point
for as many Nigerian as possible.”

The report further stated that digital revenue grew by 101.0 per
cent and fintech revenue by 28.5 per cent as customers continued to
adopt more digital products and services, a trend accelerated by
the pandemic.

“As at the end of March 2021, we had 449,100 registered MoMo
agents and 4.6 million fintech customers.

Our ability to drive service revenue growth while managing the
growth in expenses resulted in an acceleration in EBITDA growth to
19.1% and EBITDA margin expansion of 0.9pp to 53.1% YoY. This
enabled profit before tax (PBT) and profit after tax (PAT) growth
of 33.9% and 42.5% respectively,” the report said.

The report further explained that enterprise business continued
its recovery from the impacts of the COVID-19 lockdown as economic
activity improved.

It said expenses rose by 14.8 per cent, mainly driven by a 19.2
per cent increase in operating expenses arising from an accelerated
site rollout and the effects of Naira depreciation on lease rental
costs.

“The overall increase in expenses was partly mitigated by the
comparatively moderate growth of 7.8 per cent in cost of sales
following the suspension of new SIM sales and activations. As a
result, EBITDA rose by 19.1 per cent, supported by revenue growth,
with the EBITDA margin expanding by 0.9pp to 53.1 per cent,” the
report stated.

Giving insights of general business outlook, Toriola said:” Our
2021 priorities remain unchanged, with a clear focus on sustaining
double-digit revenue growth, driving 4G network expansion and
positioning our fintech business for accelerated growth in order to
unlock its full value. The acquisition of additional 800MHz
spectrum, positions us to deliver improved service speeds to
Nigerians in support of the government’s broadband initiative.”

He said MTN would continue to sustain its expense efficiency
programme to strengthen its financial position and support
margins.

“We will pursue stronger and deeper stakeholder relationship and
enhanced shared value across our stakeholder ecosystem while
ensuring that our activities align with the Government’s
development agenda. Environmental, social and governance (ESG)
principles remain at the core of everything we do, with a focus on
aligning our priorities to drive eco-responsibility, sustainable
society, sound governance and economic value for all in Nigeria,”
Toriola added.