MTN Nigeria Communications Plc has released its unaudited result for the six months ended June 30 and recorded a service revenue growth by 12.6%.
Salitent features of note include: Increase of mobile subscribers by 6.8 million to 71.1 million and Increase of active data users by 3.8 million to 29.0 million,
The company witnessed a decline in Profit before tax (PBT), which dropped by 2.0% to N139.6 billion. Earnings per share (EPS) declined by 4.7% to N4.66kobo.
Commenting on the results, MTN Nigeria CEO, Ferdi Moolman said that second quarter was characterised by COVID-19 induced lockdowns and the impact it had.
“Following a strong first quarter, we experienced a challenging operating environment in the second quarter characterised by COVID-19 induced lockdowns and the broader macro-economic impact it has had.
“Despite this, we have maintained double-digit service revenue growth of 12.6% for H1, driven by strong growth in our key revenue lines,” he said.
According to the CEO, the company’s data revenue grew by 57.6% by an increase in data users and traffic.
“Data revenue rose by 57.6% by an increase in data users and traffic. Revenue from digital and fintech services rose by 121.8% and 29.6% respectively, while voice revenue growth was 2.8% amidst a change in traffic pattern following the lockdowns.
“However, costs also increased leading to an overall decline in profit before tax and earnings per share.” he said
Moolman noted that in the first half of 2020, the company achieved 6.8 million in net additions, to connect over 71.1 million customers to the MTN network.
“In the first half of the year, we achieved 6.8 million in net additions, to connect over 71.1 million customers to our network.
“We also connected 3.8 million new users to the internet, bringing our active data subscribers to 29 million.
“Our MoMo subscribers increased by 1.6 million to 2.2 million, the majority of which were in Q2. We prioritised the upgrade of our network capacity to accommodate growth in traffic, while continuing to expand 4G network coverage, albeit at a slower pace given the constraints presented by COVID-19,” the CEO said.
Moolman added that the company offered its subscribers free SMS in the first Quarter under its Y’ello Hope Package.
“As part of several initiatives under our Y’ello Hope Package launched in Q1, we offered our subscribers free SMS targeted at providing value to the vulnerable in the society.
“It is pleasing that 75% of our subscribers benefited, sending over 4.3 billion messages through the SMS platform.
“We also offered free money transfers using the MoMo Agent Network with over 100,000 customers utilising the service,” he revealed.
MTN Nigeria had launched a free SMS Initiative in early April targeted at the low-income mass market, which was concluded at the end of June.
The company touts that more than 4.3 billion free SMS’s were sent by over 53 million customers.
MTN also recorded more 3,000 TB of free data used by customers to access zero-rated healthcare websites.
The initiative, according to the company, has been expanded to include a range of education platforms endorsed by Nigeria federal and state governments.
From a commercial angle, MTN noted that demand for data and digital services grew, as demand for voice services declined, due to the mass market segment of its customer base being impacted by the economic constraints brought about by the lockdowns in the country.
On its network and supply chain, MTN attributed the effect on the site rollout to movement restrictions and scarcity of foreign exchange. The company says the effects have been mitigated by the establishment of inventories of critical spares as well as closer control and management of the supply chain.
Regarding funding and liquidity, the company assures it is well-managed and supported by strong cash flows as well as approved headroom facilities.
“Our headroom to leverage is comfortably within banking covenants and are able to meet our operational, investment and financial requirements and obligations.
“Our foreign currency exposure is within manageable limits, with 95% of our debt in local currency, so that our balance sheet can withstand volatility,” the company noted.
On further impacts of COVID-19, MTN says they are uncertain and will depend on the evolution of the virus throughout the remainder of the year.
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