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Nigeria full-year outperformance sends MTN shares soaring

Share near seven-year high on Monday.
Image: Bloomberg

MTN Group’s biggest operation, MTN Nigeria Communications, has turned in a strong set of financial results for the year ended December 31, 2021, with margin improvement across the board and a spike in profits.

Operational margins – calculated using earnings before interest, tax, depreciation and amortisation (Ebitda) – climbed by 2.1 percentage points to 53%. Profit after tax and earnings per share jumped by 45.5% each to ₦298.7 billion (R11.2 billion) and ₦14.67 kobo respectively.

The company hiked its full-year dividend by almost 40% to ₦8.57 kobo per share.

The strong numbers, which sent MTN Group’s shares in Johannesburg to a near-seven-year high on Monday morning above R188/share, came despite a 10.6% decline in the Nigerian company’s mobile subscriber base – impacted by regulatory restrictions on new Sim sales and activations.

Service revenue grew by 23.3%, exceeding the group’s mid-teens target, driven mainly by voice, data and fintech services. MTN has now decided revised the medium-term target for service revenue growth to north of 20%, suggesting there’s momentum behind the latest performance.

Key metrics

Other key metrics included:

  • Free cash flow climbed by 31.1%;
  • Voice revenue grew by 8.4% (from a 7.9% increase in minutes of use);
  • Data revenue rose by 55.3%, underpinned by investment in the company’s 4G network, which now covers more than 70% of the Nigerian population;
  • Average data consumed per user rose by 62.7%, enabling overall data traffic growth of 85.3%. Smartphone penetration grew by four percentage points to reach 50%;
  • Fintech revenue rose by 57.3% due to sustained growth in the use of a product called Xtratime product and broader fintech services use by customers; and
  • Mobile Money transaction volume rose by 167% from an active user base of 9.4 million, up 102%.
  • Capital expenditure for the year rose by 36.7% to ₦408.3 billion (R15.3 billion), including spending on 9 336 new 4G sites. “Capex intensity remained within target levels at 18.4%,” MTN said.

Duncan McLeod is editor of TechCentral, on which this article was first published here.

© 2022 NewsCentral Media

 

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