MTN Nigeria invests N2tr as market value closes at N2.6tr

MTN Nigeria Communications Plc has invested more than N2 trillion in its business operations over the past 18 years. The market value of MTN Nigeria closed at the weekend at N2.585 trillion.

MTN Nigeria, in a regulatory filing at the Nigerian Stock Exchange (NSE) at the weekend, indicated that it has invested more than N2 trillion since incorporation in 2001.

MTN Nigeria reiterated its commitments to the Nigerian economy, noting that it had paid more than N1.7 trillion in taxes, levies and other regulatory fees in its nearly two decades of existence.

The market value of MTN Nigeria dropped by 1.59 percent to close weekend at N2.585 trillion. The share price decline came on the heels of what the telecommunications company described as “technical disagreement” with the Federal Inland Revenue Service (FIRS) over the tax treatment of the N330 billion fine imposed on the company for failing to deactivate more than five million unregistered SIM cards. MTN Nigeria had completed the payment of the N330 billion fine in May 2019 but the tax treatment remains a subject of judicial review at the Tax Tribunal.

MTN Nigeria believes the N330b fine should be treated as part of operating cost and not subjected to any other tax but FIRS holds that the fine should be subjected to tax.

MTN Nigeria has remained Nigeria’s second largest quoted company since listing on the NSE in May 2019. MTN Nigeria last month earmarked N60 billion as interim cash dividend to shareholders as it released its first earnings report as a quoted company.

The board of the telco indicated shareholders will receive a dividend per share of N2.95 for the first half ended June 30, 2019. This however represented a drop of 17.83 percent from N3.59 per share paid for the first half of 2018.

Key extracts of the six-month report for the period ended June 30, 2019 showed that MTN Nigeria’s profit before tax rose by 30.9 per cent to N141.8 billion in first half 2019 as against N108.35 billion recorded in comparable period of 2018. Profit after tax grew by 34.8 percent from N73.4 billion to N98.93 billion. Total turnover grew by 12.12 percent to N566.95 billion as against N505.67 billion. Operating profit had risen by 39.49 percent from N136.50 billion to N190.4 billion. Earnings per share rose by 34.8 percent to N4.86 compared with N3.61.

The report showed that the telco’s mobile subscribers increased by 3.3 million within the first six months of this year to 61.5 million while service revenue increased by 12.2 percent. Voice revenue increased by 11.4 percent, data revenue rose by 31.7 percent while fintech revenue increased by 21.2 per cent. However, digital revenue dropped by 64.5 percent.

The company’s earnings before interest, tax depreciation and amortization (EBITDA) rose by 40 percent to N304.9 billion while EBITDA margin improved by 10.7 percentage points to 53.8 percent.

Nigeria is MTN’s largest market, accounting for one-third of the South African Group’s business. The telco last week announced that the Central Bank of Nigeria (CBN) has granted its subsidiary, Yello Digital Financial Services Limited (YDFS), full Super Agent Licence. The licence will enable MTN Nigeria to convert its existing airtime agents and recruit other small businesses to distribute financial services.

The telco stated that the Super Agent Licence will enable it to pursue its fintech strategy, as part of efforts to deepen financial inclusion in Nigeria.

Ferdi Moolman, chief executive officer, MTN Nigeria Communications Plc, described the first half performance as a solid performance as the company continued to invest to improve network quality and expand 4G coverage.

He noted that recent work on revamping data prices and accelerating 4G network has put the company in a strong competitive position to offer more value to customers and provide new impetus for overall corporate growth.

He said the listing of the company on the Nigerian Stock Exchange (NSE) in May 2019 demonstrated the company’s commitment to the Nigerian market while providing opportunity to domestic investors to participate in and benefit from the company’s growth.