If you look at the financial data coming out of the home of Y’ello, you may not believe that MTN Nigeria is operating in Nigeria. Yes, despite the paralyses in Nigeria, MTN has found a way to keep capturing value. I mean, this company is now at its own level: no one comes close.
Revenue grew by 13.9% to N975 billion over the 3rd quarter, up from N856.549 billion recorded in the corresponding period last year. You know one thing? MTN Nigeria will clearly surpass N1 trillion naira of revenue in 2020. I think MTN currently holds that record in Nigeria; in 2020, the party will surely continue. The CEO, Ferdi Moolman, sums it up: it is data, and nothing but data growth.
CEO of MTN Nigeria, Ferdi Moolman, said, “Following a decline in voice traffic and an acceleration in data during lockdowns in Q2, we have seen a normalization of traffic as restrictions have been removed, with a recovery voice traffic and continued growth in data. This has supported a 13.9% growth in service revenue, with an acceleration of growth to 16.5% in Q3 specifically.”
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- Operating profit also increased by 7.8% from N284.73 billion in Q3 2019 to N307.01 billion in Q3 2020.
- The growth in operating profit was largely impacted by the increase in finance costs as a result of increased borrowings (September 2019: N381 billion, September 2020: N509 billion), leading to a decline of 0.6% in profit before tax to N211.6 billion.
- The following are key metrics which impacted the Q3 2020 figures posted by the firm:
- Mobile subscribers increased by 3.9 million to 75million.
- Active data users increased by 1.7 million to 30.7 million.
- Service revenue increased by 13.9% to N973.8 billion.
- Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 9.1% to N497.9 billion.
- EBITDA margin declined by 2.3 percentage point (pp) to 51.0%, due to cost pressures arising mainly from increased investments in the firm’s network and the impact on costs of the depreciation to the CBN and NAFEX exchange rates.
- Profit before Tax (PBT) declined by 0.6% to N211.6 billion.
- Earnings Per Share (EPS) declined by 3.3% to N7.1 kobo
This is a massive performance with voice revenue dropping from 73% in 2019 to 67% in 2020, but data doing the job as data revenue to total service revenue has grown from 18% in 2019 to 25% in 2020. Simply, MTN Nigeria has retooled its business model, making sure it is well positioned for the future. All hail the Y’ello king.
Full financial details are here.
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I still think that MTN should be averaging a billion dollars per quarter, it’s still way below that; but that’s where I place it, since it’s the biggest company here, at least by revenue.
It is not an ideal situation that a telecom company happens to be the biggest company by revenue here, it shows that we don’t really have businesses with massive value capturing, looking at our population; but that’s our reality for now.
Our numbers don’t inspire, only that our noise is too loud, perhaps making lots of folks to be unproductive, because they have been brainwashed into believing that Nigeria is a very rich country. If the the companies we view as poster children cannot boast of billion dollars revenue per quarter, it calls our potential and economic strength into question; we continue to disappoint.
We need to creatively find ways to make people spend more money, that’s how you grow an economy, increase productivity, and also reduce unemployment. Anyone that finds a way to make people spend money must be applauded, so before you criticise anything as being ‘frivolous or waste of money’, just remember that no economic growth, if the citizens aren’t spending enough.
All attention should be focused on stimulating demands here!