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Recently, MTN Nigeria Communications Plc (MTN Nigeria) announced its unaudited results for the quarter ended 31 March 2021 with key metrics showing EBITDA margin increasing by 0.9 percentage points (pp) to 53.1%
Capital expenditure was up by 19.3% to N89.9 billion (up 27.8% to N31.6 billion excluding right of use [RoU] assets)
Profit before tax grew by 33.9% to N102.9 billion
Earnings per share rose by 42.5% to N3.60 kobo. Unless otherwise stated, financial information is year-on-year (YoY, Q1 2021 versus Q1 2020). Non-financial information is quarter-on-quarter (QoQ, March 2021 versus December 2020).
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
Active data users declined marginally by 71,000 to 32.5 million
Service revenue increased by 17.2% to N385.2 billion
Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 19.1% to N204.5 billion
Reacting to the result, MTN Nigeria CEO, Karl Toriola averred that “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.
Operationally, service revenue in Q1 grew by 17.2% YoY, in line with our 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 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).
Thus far, more than 35 million subscribers have submitted their NINs as at 30 April 2021, representing approximately 50% of our subscriber base and 63% of service revenue. We are also actively supporting the Government’s NIN enrolment programme, with 182 points of enrolment active across the country. We are working with NIMC to increase the enrolment centres to provide an access point for as many Nigerian as possible.
Impacted by the reduction in the overall subscriber base in Q1, active data subscribers declined marginally by 71,000 to 32.5 million. However, we recorded an 86.7% increase in data traffic and a 48.5% increase in usage (MB per user) from the existing base. The improvement in data services was supported by the completion of our acquisition and activation of an additional 800MHz spectrum, enabling us 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.”
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