MTN Group has reached a milestone in Nigeria in its efforts to broaden its local shareholder base, as 139 000 retail investors picked up company stocks in the last quarter ended March.
The group announced plans a few weeks ago to reduce its shareholding by over 10% in Nigeria, saying this was part of MTN’s localisation imperative.
At the time of the proclamation, MTN Group owned 75.6% of MTN Nigeria, and was working on regulatory approvals to reduce its shareholding to approximately 65%.
Today, MTN Nigeria gave its first quarter (Q1) 2022 trading update, saying it had welcomed a significant number of retail investors to its shareholder base.
“In terms of strategic milestones, we concluded the first phase of a series of transactions to increase Nigerian ownership in MTN Nigeria, and we are delighted to have welcomed 126 720 retail investors to our shareholder base, many of whom are first-time investors,” says Karl Toriola, MTN Nigeria CEO.
“This includes Nigerian pension funds representing approximately 6.5 million Nigerian contributors.
“As at 31 March 2022, the number of retail shareholders had increased to approximately 139 000, demonstrating the advances in MTN’s localisation imperative. We also completed a group-wide brand refresh to position the business appropriately as we accelerate our growth and scale our platforms through our Ambition 2025 strategy.”
Turning to performance, Nigeria, MTN’s most profitable and biggest market, remains top performer in the group.
In Q1 2022, MTN added 1.7 million subscribers, active data users increased by 3.4 million to 35.9 million year-on-year (YOY), while active fintech subscribers rose by 6.2 million to 10.7 million.
MTN Nigeria’s service revenue increased by 22% to N469.8 billion; earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 25.7% to N257.1 billion; and profit after tax grew by 31.3% to N96.8 billion.
Earnings per share rose by 31.3% to N4.76 kobo.
“We have continued to make good progress in the first quarter, building on the momentum we achieved in Q4 2021 and delivering several key milestones as we grow our connectivity business and platforms. This was achieved against a backdrop of significant geopolitical volatility exacerbated by the war in Ukraine. This conflict has significantly impacted energy prices, broader inflation, supply chains and consumer spending,” says Toriola.
“Our financial performance in the quarter was underpinned by strong commercial momentum, driving growth across our key revenue lines. Service revenue grew by 22%, in line with our medium-term growth guidance of ‘at least 20%’. This was led by growth in data and supported by voice, fintech and digital services.
“Our ability to drive service revenue growth, while managing expenses, resulted in an acceleration in EBITDA growth to 25.7% and EBITDA margin expansion of 1.5pp to 54.6% YOY. This underpinned profit before and PAT [profit after tax] growth of 39.4% and 31.3%, respectively.”
On other performance indicators, Toriola says there is solid commercial momentum, and the ongoing execution of the Ambition 2025 strategy helped the telco despite challenging trading conditions.
MTN Nigeria data revenue rose by 54%, which Toriola says maintained the accelerated growth trajectory through growth in subscriber base and data usage.
“This was sustained by an aggressive 4G network expansion, and enhanced quality and capacity of our network to support rising data traffic. Data traffic rose by 84.8% YOY and usage (MB per user) by 69.8%.
“We added about a million new smartphones to our network in Q1, bringing smartphone penetration to 50%. As a result, our 4G network now covers 71.7% of the population, up from 70.3% in December 2021.”
Fintech revenue rose by 46.5% on the back of the growing adoption of MTN fintech services and expanded user base.
“We continue to expand our MoMo agent network, with more than 800K registered agents and over 166K active agents (agents who perform a minimum of 10 revenue-generating transactions within 30 days).”
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