MTN records N73.8bn profit in Q1 2021

MTN Nigeria Communications has recorded a profit after tax of N73.8 billion in the first quarter of 2021.

This represents 42.53 percent growth in profit when compared with the first quarter of 2020 when the company reported a profit after tax of N51.7 billion.

The company’s profit before tax grew by 33.9% to N102.9 billion as against N76.9 billion profit before tax it recorded in the first quarter of 2020.

This was contained in the telecommunications company’s first quarter report for the period of three months ended 31, March, 2021.

The profit was achieved despite MTN‘s mobile subscribers declining by 5 million to 71.5 million due to the effects of customer churn and the regulatory restrictions on new SIM sales and activation.

Active data users of the company also declined marginally by 71,000 to 32.5 million, while service revenue increased by 17.2% to N385.2 billion.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) of MTN grew by
19.1% to N204.5 billion, while EBITDA margin increased by 0.9 percentage points (pp) to 53.1%.

The Capital expenditure of the company was up by 19.3% to N89.9 billion (up 27.8% to N31.6 billion, excluding right of use [RoU] assets), just as earnings per share rose by 42.5% to N3.60 kobo.

MTN Nigeria Chief Executive Officer, CEO, Karl Toriola said the company 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
combating 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,” he said.

According to Toriola, operationally, service revenue in Q1 grew by 17.2% YoY, in line with its medium-term target, supported by growth of 42.6% and 8.0% 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
activation 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),” he added.

The CEO disclosed that more than 35 million subscribers have submitted their NINs as at 30 April 2021, representing approximately 50% of its subscriber base and 63% of service

He said the company was also actively supporting the Government’s NIN enrollment
programme, with 182 points of enrollment active across the country.

Toriola added that impacted by the reduction in the overall subscriber base in Q1, active data subscribers declined marginally by 71,000 to 32.5 million, but said the company recorded an 86.7% increase in data traffic and a 48.5% increase in usage (MB per user) from the existing base.

He explained that the improvement in data services was supported by the completion of its acquisition and activation of an additional 800MHz spectrum, enabling the company to further increase traffic by 10% and enhance throughput by 79%.

“Digital revenue grew by 101.0% and fintech revenue by 28.5% 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,” he stated.


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