MTN Nigeria Communications Plc (NSE – MTNN) on Wednesday released its unaudited results for the nine months ended 30 September 2020. The company recorded a decline in profit after tax, despite a double-digit rise in revenue. MTN Nigeria increased its mobile subscribers by 3.9 million to 75 million within the period in review.
Its active data users rose by 1.7 million to 30.7 million.
Revenue grew by 13.9% to N975.8 billion in the first nine months of the year from N856.5 billion recorded in the same period in 2019. N337.7 billion revenue was recorded for the three months, July to September 2020, up from N289.6 billion recorded in the same period in 2019.
Main components of the revenue;
- Voice revenue – N558.7 billion
- Data revenue – N241.6 billion
- Interconnect and roaming – N97.0 billion
Major components of the expense column include;
- Direct network operating costs – N227.6 billion
- Depreciation of property, plant, and equipment – N112.6 billion
- Finance cost – N107.5 biilion
- Interconnect costs – N82.7 billion
- Depreciation of right of use assets – N52.0 billion
- Discounts and commissions – N49.3 billion
- Other operating expenses – N47.1 billion
- Employee benefit – N29.5 billion
- Amortisation of intangible assets – N26.2 billion
The operating profit rose by 7.8% to N307.0. However, it 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
Profit for the period declined by 3.3% to N144.2 billion while the earnings per share settled at N7.09 the net assets per share stood at N5.77 a 28.3% increase. In the three months, July to September 2020 MTNN posted a slight decline in profit to N49.4 billion from N49.7 billion in 2019.
- Read also; Airtel Africa Plc grew revenue by 10.7% as customer base rises by 12.0% YoY
- Flour Mills of Nigeria Plc rakes in N355bn revenue, profit up by 68% for H1 2020/2021 financial year
The total assets of MTN Nigeria rose to N1.8 trillion as at 30 September 2020 from N1.5 trillion recorded as at 31 December 2019.
Major components of the assets include;
- Property, plant, and equipment – N628.2 billion
- Right of use assets – N587.1 billion
- Cash and cash equivalents – N237.6 billion
MTN Nigeria is sitting on huge liability as only 6.7% of the total assets are financed by equity (N117.4 billion) with the remaining 93.3% financed by liability (N1.6 trillion).
Major components of the liabilities include;
- Lease liabilities – N582.1 billion
- Long-term borrowings – N335.3 billion
- Trade and other payables – N242.6 billion
- Short-term borrowings – N173.6 billion
Cash flow remained strong as the company’s cash and cash equivalents at end of the period stood at N238.7 billion
About the company
MTN Nigeria Communications Plc formerly MTN Nigeria Communications Limited, (the Company) together with its subsidiaries (the Group) carries on the business of building and operating GSM Cellular Network Systems and other related services nation-wide in Nigeria.
MTN Nigeria Communications Plc’s subsidiaries are XS Broadband Limited, Visafone Communications Limited, and Yello Digital Financial Services Limited. Their principal activities are the provision of broadband fixed wireless access service, high-quality telecommunication services, and mobile financial services (fintech) respectively. Visafone Communications Limited is currently undergoing voluntary liquidation.
By; Ifunanya Ikueze
