MTN Nigeria posts N94.9bn PAT in H1 2020 Results


MTN Nigeria Communications Pic, MTN Nigeria, one of Africa’s largest providers of communications services which has a clear vision to lead the delivery of a bold, new digital world. today announces its unaudited results for the six months ended 30 June 2020.

Salient features:

  • Mobile subscribers increased by 6.8 million to 71.1 million
  • Active data users increased by 3.8 million to 29.0 million
  • Service revenue increased by 12.696 to NGN637. 0 billion
  • Earnings before interest tax, depreciation and amortisation (EBITDA) grew by 8.296 to N327.1 billion
  • EBITDA margin declined by 2.0 pp to 51.3%
  • Profit before tax (PBT) declined by 2.096 to N139.6 billion
  • Earnings per share (EPS) declined by 4.796 to N4.66kobo
  • Interim dividend per share of N3.50 kobo

Unless otherwise stated. financial information is year-on-year (YoY. H1 2020 versus H1 2019) and nonfinancial information is year-ro-dare (lune 2020 versus December 2019).

MTN Nigeria CEO, Ferdi Moolman comments:

“Following a strong 5rs!‘ quarter, we experienced a challenging operating environment in the second quarter characterised by COVID-l9 induced lockdowns and the broader macroeconomic 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.

Dara revenue rose by 57.6% supported 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 2.896 amidst a change in frame pattern following the Iockdowns. However, costs also increased leading to an overall decline in profit before tax and earnings per share.

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 02. 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-I9.

As part of several initiatives under our Y’ello Hope Package launched in O1, we offered our subscribers free SMS targeted at providing value to the vulnerable in the society. It is pleasing that 75% of our subscribers benefitted, 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.

During the period, we changed the accounting treatment of the Value Added Tax (VAT) component of our lease payments resulting in some impact on margins. In addition to this, the combined effect of the foreign exchange rate adjustments. the 2.596 increase in value-added tax and the associated costs of COVID-19 initiatives have impacted margins.

As a result, growth in EBITDA was 8.2% in H1, while E BIT DA margin declined by 2.0pp to 51.3% and profit before tax and EPS declined by 2.096 and 4. 796. respectively.

In line with our dividend policy, the Board of Directors has approved an interim dividend of N350 kobo per share to be paid out of distributable net income.”

Operational review

We recorded a 15.6% growth YoY in our‘ mobile subscriber base to 71.1 million, providing support for voice revenue. Voice revenue. accounting for 67.9% of service revenue and up by 2.896, remained in 21‘th in H1 in an environment where the effect of lockdowns impacted traffic, particularly in April and May.

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Encouragingly, we have started to see a recovery following the gradual easing of lockdown. The continued deployment of additional SIM registration devices, rural telephony initiatives and targeted offers using our customer value management (CVM) I’oolkil’ will continue to provide support for continued growth in voice revenue.

Data revenue. making up 24.2% of service revenue. continued to grow. achieving 57.6%. This was realised through increased data subscribers, improved 4G penetration and enhanced network capacity to support traffic growth due to the lockdown.

Overall, PAT and EPS declined by 4.7% a piece. reflecting an increase in taxation mainly due to over-investment allowance and exempt income.

Treatment of VAT on the Lease Payments

During the period. we reviewed the treatment of non-recoverable VAT on tease payments which was previously included in the measurement of the lease liability and right of use asset and was depreciated over the leasing term As practice has developed, we have reassessed this treatment and excluded the nonrecoverable VAT from both the lease stability and right of use asset, and accounted for it as an expense over the lease period. We applied the revised accounting policy retrospectively from the date of IFRS 16 adoption. This resulted in 00.2pp decline in EBITDA margin in H1.


The early trends emerging from the easing of lockdown restrictions indicate a steady normalisation of our revenue mix.

However, it remains unclear how this will continue to evolve for the remainder of the year given the ongoing uncertainties presented by the COVlD-19 pandemic including its potential effects on the economy and our customers White we expect the operating environment to remain challenging.

We will continue to build on our operational and financial resilience and execute on our strategy to position the business to sustain growth over the medium-term.

We will continue to invest in our networked ramp up our 4G rollout, which was slowed down by the impact of COVtD-IQ during HI.

We have prioritised the work to improve capacity and expand coverage to capture new cities and broaden rural connectivity this is important as traffic on our network continues to increase. We have built up a solid inventory of critical parts during the Iockctown period, and are welt prepared in the event of further disruptions.

We remain committed to expanding our fintech and digital service offerings. as we come to expand our MoMo Agent network with the conversion of our existing airtime agents Into MoMo agents. and broaden our service offerings We remain on track to achieve our agent network target of 300.000 by yeor~end.

The environment remains, fluid and we are assessing the various impacts on our business on an ongoing basis and implementing mitigating interventions as necessary.