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Market Digest Nigeria

Business

MTN grows underlying service revenue 11% in Q1

MTN Group said it delivered a solid performance in the first quarter, increasing service revenue 16.5 percent to ZAR 38.7 billion.

On a constant currency basis, service revenue rose 11.1 percent, as strong growth in markets such as Ghana and Nigeria helped offset lower revenues in its home market South Africa.

EBITDA increased by 15.6 percent, with the EBITDA margin improving by 2.1 percentage points to 43.2 percent, in line with medium-term targets.

The group recorded voice, data and fintech revenue growth of 6.3 percent, 26.4 percent and 26.0 percent respectively. Mobile subscribers rose by 6.6 percent to 257.3 million across its 21 operations. Active data subscribers increased by 2.9 million to 98.3 million, while active mobile money customers increased by 0.4 million to 35.1 million.

MTN said the Covid-19 situation is an evolving one and will undoubtedly affect the year ahead. Given the uncertainties associated with the duration and economic impact of the pandemic, it is difficult to reliably quantify the financial effects on the business at this early stage. However, the company has lowered its capex budget for the year on expected disruptions to the supply chain and challenges rolling out under lockdown rules, combined with a focus on preserving liquidity.

As a result, MTN expects to invest ZAR 21-22 billion this year, compared to the ZAR 28 billion forecast at the full-year results. It will also continue with its cost control efforts as part of its medium-term strategy.

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