Nigeria’s largest Telecoms provider, MTN Nigeria has posted a Profit After Tax (PAT) of N202.1 billion in 2019. This is a significant 38.73% increase from N145.68 billion recorded in 2018.
This was disclosed in the telco’s audited result for the year ended 31 December 2019. The report is the company’s first full-year report since debuting on the Nigerian Stock Exchange.
Since the Listing on NSE, the MTN’s earnings per share rose by 38.8% to close at N9.9k for the year. Currently, the shares sell at N110.
MTN Nigeria remains the largest telecom provider
MTN remains Nigeria’s largest telecom provider as the report shows that the total number of mobile subscribers increased by 6.1 million. Its total mobile subscribers currently stand at a record 64.3 million. This represents a 10.5% net growth from the numbers recorded in the previous year.
The number of active subscribers also rose to 25.2 million, representing a significant 34.9% increase from 2018. Chief Executive Officer of MTN Nigeria, Mr Ferdi Moolman attributed the increase to certain initiatives that enhanced coverage and drove data usage penetration.
“These initiatives include optimising frequencies, expanding our 4G network coverage with over 6,000 additional sites leveraging 800MHz spectrum and repositioning our commercial data offerings.”Mr Ferdi Moolman, Chief Executive Officer of MTN Nigeria.
The ratio of active data users to total mobile subscribers increased to 39.2% in 2019. This represents a strong potential for growth as 4G population coverage keeps increasing.
Moolman disclosed that about 132 cities already have 4G coverage. He added that the 4G population coverages closed the year at 43.8%.
“We closed the year with 132 cities covered by 4G and became the first mobile network operator in West Africa to demonstrate the capability of 5G technology.”Mr Ferdi Moolman, Chief Executive Officer of MTN Nigeria.
Double-digit growth in service revenue
MTN Nigeria recorded over N1 trillion in revenue for the second year in a row. The company generated a revenue of N1.2 trillion, which is a 12.57% increase from the N1.039 trillion generated in 2018.
MTN’s Profit before tax also rose by 31.06% to N290.1 billion from the N221.34 billion which was recorded in 2018.
Similarly, MTN’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 45.2% to reach N629.9 billion.
The telecom company also showed increased profitability with its business model as the EBITDA margin rose from 44.8% to 53.9%. Free cash flow rose by 26.6% to N316.1 billion.
However, the report shows an increase in most of its operating costs. Capital expenditure, excluding Right of Use (ROU) assets, increased by 13.1% to peak at N208.3 billion at the close of 2019.
In 2019, MTN Nigeria’s volume of voice traffic increased by 7.6%, supporting its revenue growth. The growth of Voice revenue remained healthy at 8.4% and accounted for 72.7% of service revenue generated.
MTN Nigeria’s financial report shows an increase in the adoption of the smartphone by MTN users in Nigeria. Data which is essentially used on smartphones showed increased traffic of about 85.8%.
At the end of the year, smartphone penetration on the network was 41.8%, with over 5.3 million new smartphones added. This resulted in a 42.4% increase in data revenue for the year. The contribution of data to service revenue has also increased to 18.8% from 14.9 in 2018.
MTN’s foray into fintech has been a huge game-changer as it paved the way for telecom companies to consider verticals in banking. In 2019, MTN’s fintech revenue grew by 23.3%.
The company’s Value Added Service (VAS) business which includes mobile money (Fintech) rose from N32.2 billion in 2018 to peak at N37.1 billion at the end of 2019. The VAS revenue also includes airtime lending (Digital) and subscriber identification module (SIM) back up services.
The company’s active base for digital subscriptions surpassed 2.1 million users in 2019. In the report, the growth of its super-agent (MoMo) service that now has over 108,000 registered agents nationwide was also highlighted.
MTN to expand into cash deposits and withdrawals
Following the success of its fintech sector in 2019, MTN is planning to broaden its financial offering.
The telecom plans to launch a more extensive financial bouquet. This will include cash deposit and withdrawal services, bill payments and facilitation of e-commerce.
The summary of the audited result shows that MTN had a profitable year, with steady growth both in revenue and subscribers.
Although there was an increase in capital expenditure, the rise in EBITDA margin shows overall business profitability.
With MTN Nigeria’s plan to invest N600 billion into Nigeria’s network infrastructure especially 4G penetration, the probability that 2020 will be another successful year for the telecom giants is very high.