The board of telecommunications giant- MTN Nigeria Plc, on Friday, gave shareholders reasons to cheer, with the release of its audited financials for the year ended December 31, 2019, with net profit rising faster than revenue after putting costs relatively under control.
According to the result, while revenue rose to N1.169tr, the largest still so far, up from N1.039tr in the corresponding period of 2018, net profit at N202.11bn, up by N56.425bn or 38.73% from N145.685bn. The net profit, however, came behind the N208bn declared by financial powerhouse, Zenith Bank Plc.
MTN Nigeria’s net profit, however, translated to Earnings Per Share of N9.93, up from N7.16, out of which the directors have recommended a final dividend of N4.97 per share. This brings total dividend payout for the year to N7.92, payable to shareholders whose names appear in the register as of close of business on April 17, 2020, following which the register will be closed on April 20; while payment is slated for May 19, 2020, a day after the annual general meeting in Lagos.
Specifically, the company’s revenue inched by N130.617bn or 12.57%, boosted by the 23.3% fintech revenue growth- specifically its airtime lending serves.
A breakdown of the revenue, according to the various income streams shows that voice maintained the lead, contributing the lion’s share of N725.448bn, up from N681.911bn; data contributed N219.397bn, up from N154.134bn; while SMS contributed N13.505bn, down from N14.306bn. Interconnect and roaming income jumped from N102.568bn from N125.042bn; among others.
Other income plunged from N2.225bn in 2018 to N96.92m; direct network operating costs dropped by N63.507bn or 20.78% from N305.519bn to N242.012bn. Value-added services cost fell from N16.643bn to N12.459bn; costs of handsets and accessories soared to N12.765bn to N6.191bn; roaming costs stayed flat at N4.037bn from N4.173bn; just as transmission costs stood at N5.553bn from N5.508bn.
Discounts and commissions rose slightly to N56.585bn from N51.287bn; advertisements, sponsorships and sales promotions rose from N16.274bn to N19.848bn; employee costs increased slightly also from N27.152bn to N30.705bn. Depreciation of property, plant, and equipment inched from N141.162bn to N147.807bn; amortization of intangible assets grew to N29.996bn from N26.7bn. The 2019 numbers were also impaired by the N56.817bn depreciation of right of use assets, from nil in the prior year; just as there was a nil entry in national reversal difference payment to the Central Bank of Nigeria, from the previous N19.192bn.
Other operating expenses for the period dropped to N50.694bn from N59.793bn; resulting in an operating profit of N395.297bn, up by N129.184bn or 48.54%, as against the N266.113bn of 2018.
Finance income dropped slightly to N20.132bn from N22.568bn; finance costs jumped by N57.986bn or 86.11% from N67.339bn in the prior year, to N125.325bn, the bulk of which was the N68.146bn interest expense- lease liability, which did not feature in 2018; followed by interest expense on borrowings of N46.967bn, up from N36.375bn. Profit before tax, therefore, climbed N290.104bn from N221.342bn, an increase of N68.762bn or 31.06%
The company made tax provision of N87.993bn, up by N12.337bn or 16.31% from N75.656bn in 2018; resulting in the net profit of N202.11bn
In an accompanying statement, the management listed some salient features of the 2019 performance score-card to include a 6.1m increase in mobile subscribers to 64.3m, giving it a clear lead in the industry; while active data users rose even higher by 6.5m to 25.2m.
Commenting on the result, chief executive of the company, Ferdi Moolman, linked the double-digit growth to the success of its BRIGHT strategy, despite the challenging operating environment
On the outlook, Moolman expressed optimism about the business in 2020, even as it continues its 4G network coverage expansion to deliver high-speed internet to more people.
Over the next three years, he said MTN Nigeria plans “to invest about N600bn in our network. This investment will enable us to accelerate our 4G network expansion, deepen population coverage and support the Federal Government’s broadband initiative.”
He expressed excitement at the possibilities that the transition to digital presents for the business, as well as the growth and development of Nigeria.