MTN Nigeria

MTNN jumps on earnings beats, to prioritise expansion of 4G Network

MTN Nigeria Communication Plc.’s revenue increased by 12.03% to N856.476 billion at the end of 9 months of the financial year 2019 from N764.455  billion in the comparable period in 2018. Share price jumps 5 kobo to N127 on the earnings news.

The earnings feat was achieved on the back of growth in 10.1% increase in revenue from voice and about 35% in data services.

Currently, MTN Nigeria Plc connects more than 61 million people across the country, the group that entered Nigerian market in 2001 has highest market share in the industry.

In the stock market, MTNN share price closed trading at N126.95 on Tuesday. The group market capitalisation pitched at N2.585 trillion after the earnings released from N2.584 trillion.

The company earned N7.29 on its shares on shares outstanding of 20,354,513,050 units.

Analyses of the results show that Voice contributed 73.5% to service revenues in the period as against 74.8% in the comparable period.

Meanwhile, revenue from data service accounted for 18% of the service revenues as against 15% recorded last year.

MTNN said it added 1.6 million smartphones to its network, which raised penetration to 41.7%. Also, the numbers of active data subscribers surged by 7.6% to 22.3 million.

MTNN Chief Executive Officer, Ferdi Moolman said: “Our performance was very encouraging, demonstrating the resilience of our business despite a challenging operating environment”.

The telecom Chief stated that MTN Nigeria recorded 61.6 million subscribers which represent 0.1 million increased compare to previous quarter in the year.

Due to its SIM re-registration requirement by the NCC, MTNN said it lost 600,000 active subscribers, thus limit its base growth.

Analysis of the statement of cash flow indicates that MTNN generated an operating cash flow of N70.551 billion in the period as against N148.323 billion profit declared in the period.

Profit before tax was N171.035 billion a year ago, but it jumped to N212.005 billion at the end of the period. The increase represents 23.95% above the base year.

This came despite the fact that the group finance cost jerked up by 72.82% from N53.221 billion to N91.977 billion.

Other income line also supported the group bottom line, went up from N69.771 billion to N72.491 billion in the period.

Meanwhile, the group’s total assets expanded 63.42% from N941.739 billion at the beginning of the year to N1.539 trillion.

This was driven by N492.415 billion right of use assets added to its non-current assets. This came in addition to 85% increase in current investment which surged from N65.468 billion to N120.902 billion in the period.

The right of use was depreciated by N41.469 billion, thus reduced the group lease liabilities to N469.115 billion in the period, as lease liabilities of N32.118 billion matures.

Further to that, the result came stronger on the back of improved cash position which surged by 93% from N53.011 billion at the beginning of the year to N102.21 billion at the end of the 9 months in financial year 2019.

Its equity size nosedived 58.67% from N219.352 billion to N90.656 billion on account of 52.8% reduction in retained earnings, from N154.201 billion to N72.753  billion in the period.

At 39.07% year on year increase, the group hit N286.25 operating profit mark compare to N205.83 billion recorded in the comparable year.

Ferdi Moolman, the Chief Executive Officer said that in the remaining quarter of the year, the management will prioritise expansion of 4G network coverage and drive active subscribers’ growth.


“We expect voice and data revenues to continue to grow on the back of subscribers’ growth and increasing demand for data services.

“We are excited about progress with our digital services following the completion of VAS optimisation and we are focus on sustaining quarter on quarter earnings growth”, the CEO said.

The telecom’s company earnings before interest, tax, and depreciation and amortization margin expanded on the back of efficient leverage position it maintained in the period.

On USSD billion issue, MTN said: “our extensive engagements with banks over implementation of end user billing for USSD-based banking services reflects  our determination to find solution that is affordable for the customers and drive maximum uptake and use of financial services”.

The group in a statement said: “Banks had always been on corporate billing plan that allows them pay the USSD access fees at wholesale price.

“We view this as an efficient model that eliminates separate charges by the banks and telecoms companies that ensures billing transparency”.

“We believe that cost associated with USSD banking services should be charged to the customers once as with other USSD services we provide”, MTNN said.

NSE approves MTN Nigeria listing at N90 per share

VIAJulius Alagbe, Economic/Financial Analyst
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