MTN Reports N96.82bn Q1 Profit, Loses 1.3m Mobil Subscribers To SIM Sales Restriction

The board of telecommunications giant- MTN Nigeria Communications, on Friday, reported a net profit growth 31.28% growth in the first quarter ended March 31, 2022, faster than the 22.23% improvement in revenue for the period, increasing the likelihood of a better dividend payout, should the momentum be sustained as expected.

A statement by the company listed other key metrics for the period to include the 1.3m year-on-year decline in mobile subscribers, due to regulatory restrictions on new SIM sales and activations, just as 1.7m subscribers were added in Q1 2022, compared to the 2021Q4 level; Justas active data users rose to 35.9m YoY. Other highlights of the period, MTNN noted, include a 6.2m increase in active fintech subscribers rose to 10.7m YoY.

According to details of the report presented through the NGX Exchange portal, revenue for the period rose from N385.318bn to N470.984bn, a breakdown of which showed that voice continues to take the lead with N218.408bn, up from N208.622bn; followed by data with N163.308bn, a more significant growth from N105.704bn in the preceding Q1. Direct network operating costs rose to N107.275bn from N92.347bn, on the growth in BTS leases from N65.858bn to N78.496bn; while value-added services gulped N5.712bn from N4.699bn in the preceding first quarter.

Cost of starter packs, handsets, and accessories soared to N4.904bn in the first three months of 2022, from N269m in the comparative period; interconnect costs rose to N35.539bn from N31.176bn, and roaming costs from N851m to N1.215bn; while transmission costs rose marginally from N1.989bn to N2.007bn. Discounts and commission increased to N21.79bn from N18.914bn; advertisements, sponsorship and sales promotions stood at N5.951bn from N3.609bn; employees costs jumped to N10.997bn from N9.316bn; just as depreciation of property and equipment rose to N40.979bn from N32.224bn. Depreciation of rights of use assets moved north at N24.566bn from N20.717bn; amortization of intangible assets dropped to N12.277bn from N18.502bn; while other expenses rose from N17.598bn to N18.446bn.

Operating profit, therefore, stood at N179.326bn from N133.107bn; while finance income jumped to N4.597bn from N1.227bn, lifted by the N3.888bn interest income on bank deposits. Finance costs increased from N31.345bn to N40.325bn, the bulk of which was the interest expense on leases at N23.271bn from N21.588bn; ahead of the N14.687bn interest expense on borrowings, up from N6.701bn; resulting in profit before tax of N143.588bn, compared with N102.989bn reported in the corresponding period of 2021. The tax expense of N46.768bn, resulted in a net profit of N96.82bn, against the N73.738bn reported in the prior Q1; translating to earnings per share of N4.76, compared to the previous N3.62 each.

Reacting to the score-card, Chief Executive of MTN Nigeria, Karl Toriola said the company continues “to make good progress in the first quarter, building on the momentum we achieved in Q4 2021 and delivering several key milestones as we grow our connectivity business and platforms. This was achieved against a backdrop of significant geopolitical volatility exacerbated by the war in Ukraine.”

Following the first sales of a series of transactions to increase Nigerian ownership in MTN Nigeria, he expressed delight in welcoming 126,720 retail investors, many of whom are first-time investors, including Nigerian pension funds representing approximately 6.5m Nigerian contributors, to its shareholder base. The number of retail shareholders, he said, had increased to approximately 139,000, as of March 31,

2022, “demonstrating the advances in MTN’s localisation imperative.”

Asides plans to launch its 5G services once regulatory approval is obtained, Toriola, announced the Central bank of Nigeria (CBN) approval for its MoMo Payment Service Bank (PSB), which “will enable us to offer financial services in line with the CBN’s guidelines and support the government in fulfilling its agenda of driving financial inclusion in Nigeria.

He announced plans to launch MoMo PSB this second quarter, leveraging on its approximately 10.7 million active users and 166k active agents, to accelerate the rollout of advanced services in its mission to drive digital and financial inclusion.

On the outlook, he said the group remains focused “on building on the solid foundation of growth we have laid thus far. We will continue to ramp up gross connections through our rural connectivity drive and leverage CVM initiatives to grow our subscriber base and usage further.”

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