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MTN loses subscribers in its biggest market

While the number of its mobile subscribers declined by 7.6 million to 68,9 million, impacted by regulatory restrictions on new SIM sales and activations, MTN Nigeria remains optimistic that its 20th year of operation will yield positive returns.

According to unaudited results for the half-year ended 30 June 2021, Active data users declined by approximately 52,000 to 32.5 million, service revenue was up by 24.1% to N790.3 billion, Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 27.6% to N417.2 billion, EBITDA margin improved by 1.4 percentage points (pp) to 52.7%, capital expenditure was up by 39.1% to N186.4 billion (up 50.6% to N114.5 billion excluding right of use [RoU] assets), and dividend per share of N4.55 kobo, up 30%.

In a statement the company noted that its mobile subscribers closed H1 at 68.9 million, down 9.9% from December 2020.

“This was due to the regulatory restrictions on new SIM sales and activations, which was lifted on 19 April 2021. Although the initial run-rate of additions has been slower than usual due to new process requirements, we anticipate growth to normalise in the short-term as more of our acquisition centres are certified for SIM registration.”

Commenting on the results, MTN Nigeria CEO Karl Toriola said: “In the first half of 2021, we made good progress strengthening the resilience of the business, managing the impact of the COVID-19 pandemic and enhancing support to our people, customers and other stakeholders. We extended our commitment to the Coalition Against Covid-19 (CACOVID) with an additional N3 billion contribution over a two-year period, half of which has already been paid. This is in support of efforts to promote the health and security of Nigerians, as we navigate our way through the pandemic; and in line with our Y'ello Hope initiatives through which we provided support to our broad base of stakeholders to the value of approximately N25 billion in 2020.”

“Our progress towards achieving greater business resilience is reflected in the upgrade by Global Credit Ratings (GCR) of our national scale long-term issuer rating to AAA and affirmation of our national scale short-term rating of A1+ with a stable outlook. This puts MTN Nigeria on the highest possible GCR scale for short-term and long-term ratings, providing a solid platform for growth.”

The company noted that its board has approved the company’s participation in the Road Infrastructure Tax Credit (RITC) Scheme.

A statement by the company reads: “This is in response to Government’s drive towards public-private partnerships in the rehabilitation of critical road infrastructure in Nigeria. We intend to participate in the restoration and refurbishment of the Enugu-Onitsha Expressway. Conversations in this regard have already commenced, and further announcements will be made in due course.”

“In line with our desire to plant deeper and more permanent roots in Nigeria, we have also initiated plans to commission a purpose-built, state of the art MTN Head Office, designed to act as a central hub for our network, a catalyst for creativity and innovation, and a showcase for the flexible working structures that are driving efficiency gains in this new normal working environment. Aligned with our wider commitment to environmental sustainability, it will meet the highest global environmental standards, demonstrating the role of green technology in our future.”

Following MTN Group’s stated intention to sell down up to 14% of its investment in MTN Nigeria, subject to market conditions over the medium-term, MTN Nigeria’s shareholders approved an equity shelf programme at the last AGM

“This will facilitate a process to increase ownership of the Company by more Nigerian retail and institutional investors. Alongside this, we further localised our predominantly Nigerian management team with the appointment of Nigerians to two key senior positions (Chief Marketing Officer and Chief Information Officer) previously held by expatriates,” the company added.

MTN Nigeria said it is continuing to invest in its 4G network coverage and plans to connect approximately 1,000 rural communities to our network this year with additional 2,000 communities in 2022.

“Finally, our Board of Directors has approved an interim dividend of N4.55 kobo per share to be paid out of distributable net income. This represents a growth of 30% over N3.50 kobo per share paid in H1 2020.”

June executive meeting

In June, MTN group executives met in Nigeria on a three-day working visit amid growing security concerns, including kidnapping, robbery and insurgency.

MTN Group CEO, Ralph Mupita, and Group CFO Tsholo Molefe met with MTN Nigeria Chairman, Dr Ernest Ndukwe (OFR) and MTN Nigeria CEO, Karl Toriola, along with select partners and key stakeholders in the country.

Nigeria is a key market for MTN. According to recent figures released by the Nigerian Communications Commission (NCC) the operator has over 82 million subscribers.

Mupita said: “Nigeria is one of our most important markets. We have a proud history of partnering with Nigeria and Nigerians to drive faster and more inclusive growth through digital transformation, and I look forward to this opportunity for in-person engagements with our key stakeholders to discuss the future and deepen the relationships we have built over time.”

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