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MTN Nigeria quarterly update
MTN Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1994/009584/06
ISIN: ZAE000042164
Share code: MTN
("MTN", "MTN Group" or "the Group")
MTN Nigeria quarterly update
MTN Group is a leading emerging market mobile operator, serving approximately 221,3 million people in
22 countries across Africa and the Middle East. Our vision is to deliver a bold, new digital world to
our customers. MTN Nigeria is the leading mobile operator in Nigeria with approximately 54,5 million
subscribers.
Highlights for MTN Nigeria
- MTN Nigeria reported strong subscriber net additions of 2,3 million
- Active Mobile Money customers increased to 2,0 million
- Naira service revenue increased by 14,5% to N248,3bn
- Data revenue increased by 73,2% year-on-year
- EBITDA margin increased by 332bp to 41,8%
- MTN Nigeria invested N17,9bn in capex in the period
Financial growth rates are year-on-year (the three-month period ended 31 March 2018 versus the three months ended
31 March 2017) unless otherwise stated. QoQ growth rates refer to 1Q18 vs 4Q17. Data revenue refers to access data
revenue only. Digital revenue refers to Mobile Money (MoMo), rich media services and value-added services (VAS)
revenue.
MTN Nigeria CEO Ferdi Moolman comments:
"MTN Nigeria's performance during the first quarter reflects the continuation of the positive momentum evidenced in
the second half of 2017 following a period of increased investment and renewed focus on operational execution.
We continue to evolve our data pricing aligned to the Group's dual-data strategy. With the strong progress made on
both network quality, availability and coverage, we believe the business is well positioned to benefit from the
material data opportunity the Nigerian market presents.
We are making good progress towards concluding the IPO process in Nigeria and we remain committed to executing on
this during the current financial year."
MTN NIGERIA
In the first quarter of 2018, MTN Nigeria continued with the positive momentum of 2017, increasing naira service
revenue by 14,5% year-on-year, led by a 73,2% increase in data revenue and 15,2% growth in voice revenue. The
improving macroeconomic environment and consumer sentiment across the country supported the positive revenue
trends evidenced in recent months.
While the increase in voice revenue was encouraging, it was partially supported by the lower customer spend on
digital services. As the growth in digital services is expected to resume in the latter part of the year, this may
impact growth rates in voice revenue. In the first quarter, our revenue from these services was dampened, amongst
others, by the double opt-in feature, which limited the uptake of new services. As customers get used to this
requirement, we expect quarter-on-quarter growth in revenue for the digital services to resume in the second
half of the year.
In the first quarter, a 62,2% increase in billed data volumes drove the strong growth in data revenue supported by
data price optimisation.
MTN Nigeria reported net additions in the quarter of 2,3 million following on from the 2,0 million adds in 4Q17
as the business benefited from the increase in our SIM registration footprint and extended customer value management
(CVM) campaign's supporting a marked increase in gross connections.
Focused on retaining network leadership, we rolled out 298 3G and 174 4G sites in the quarter. The 4G rollout remains
centred on the top 10 cities across the country. MTN Nigeria was ranked number 1 on network NPS in the period.
MTN Nigeria's stronger-than-expected growth in revenue allowed the business to benefit from increased scale.
With expenses well controlled, and the naira stable, the EBITDA margin continued to expand in the quarter, to
41,8%. The margin benefited from further optimisation of our distribution channels and reduced bad debt provisions
as we saw an improvement in interconnect payments.
We secured approval from the Nigerian Communications Commission to use the 700MHz spectrum for the deployment of
telecoms services and continued to engage with the regulatory authorities on our rollout obligations as well as on
interference on the spectrum band. In our work to ensure we remain compliant with all appropriate regulations,
we continue to proactively engage with the regulatory authorities.
The financial information on which this quarterly update is based has not been reviewed and reported on by
MTN's external auditors.
Fairland
7 May 2018
Sponsor
Deutsche Securities (SA) Proprietary Limited
Summary income statement for the three month period ended 31 March
Three month Three month
period ended period ended
March 2018 March 2017
Restated
Nm Nm
Revenue 249 223 217 633
Other income 28 35
Direct network and technology operating costs (67 478) (62 611)
Costs of handsets and other accessories (3 035) (980)
Interconnect and roaming costs (25 055) (21 573)
Staff costs (5 891) (5 329)
Selling, distribution and marketing expenses (15 762) (15 265)
Government and regulatory costs (6 585) (5 421)
Other operating expenses (21 244) (23 034)
EBITDA before Nigeria regulatory fine 104 201 83 455
Nigeria regulatory fine - -
EBITDA 104 201 83 455
Depreciation of property, plant and equipment (33 410) (29 779)
Amortisation of intangible assets (6 701) (6 639)
Impairment of goodwill - -
Operating profit 64 090 47 037
Net finance costs (15 452) (15 065)
Loss on derecognition of long-term loan receivable - -
Net monetary gain - -
Share of results of associates and joint ventures after tax - -
Profit before tax 48 638 31 973
Income tax expense (16 435) (9 578)
Profit/(loss) after tax 32 203 22 394
Attributable to:
Equity holders of the company 32 203 22 394
Non-controlling interests - -
Basic earnings/(loss) per share (Naira) N79.1 N55.01
Diluted earnings/(loss) per share (Naira) N79.1 N55.01
Summary statement of comprehensive income for the three month period ended 31 March
Three month Three month
period ended period ended
March 2018 March 2017
Restated
Nm Nm
Profit/(loss) after tax 32 203 22 394
Other comprehensive income after tax
Items that may be reclassified to profit or loss
Net investment hedges
Foreign exchange movement on hedging instruments - -
Deferred and current tax - -
Available-for-sale financial assets
Gains arising during the year - -
Exchange differences on translating foreign operations
including the effect of hyperinflation
Losses arising during the year - -
Items that have been reclassified to profit or loss
Reclassification of foreign currency translation differences
on loss of significant influence - -
Other comprehensive income for the year (238) 117
Attributable to equity holders of the company (238) 117
Attributable to non-controlling interests - -
Total comprehensive income for the year 31 965 22 511
Attributable to:
Equity holders of the company 31 965 22 511
Non-controlling interests
31 965 22 511
Summary statement of financial position as at
31 March 31 December
2018 2017
Restated
Nm Nm
Non-current assets 731 663 751 698
Property, plant and equipment 564 693 582 439
Goodwill and intangible assets 124 115 128 602
Investments - -
Investment in associates and joint ventures - -
Deferred tax and other non-current assets 42 855 40 657
Current assets 243 540 243 563
Other current assets 89 120 78 955
Trade and other receivables 34 791 33 425
Restricted cash 42 865 41 618
Cash and cash equivalents 76 764 89 565
Total assets 975 203 995 261
Total equity 106 109 112 756
Attributable to equity holders of the company 106 109 112 756
Non-controlling interests - -
Non-current liabilities 303 674 340 757
Interest-bearing liabilities 144 543 135 545
Deferred tax and other non-current liabilities 159 132 205 212
Current liabilities 565 420 541 748
Interest-bearing liabilities 155 170 119 820
Trade and other payables 216 637 246 087
Other current and tax liabilities 193 613 175 841
Total equity and liabilities 975 203 995 261
Summary statement of changes in equity for the period ended 31 March
Balance at Balance at
31 March 31 March
2018 2017
Restated
Nm Nm
Opening balance at 1 January 112 756 81 655
Opening reserve adjustment for impact of IFRS 9 (82)
Opening reserve adjustment for impact of hyperinflation
Restated balance at 1 January 112 674 81 655
Total comprehensive income 32 048 22 511
Profit/(loss) after tax 32 285 22 394
Other comprehensive income after tax (238) 117
Transactions with owners of the company
Dividends declared (38 613) -
Other movements
Attributable to equity holders of the company 106 109 104 167
Non-controlling interests
Closing balance at 31 December 106 109 104 167
Dividends declared during the period (Naira per share) 94,85 -
Dividends declared after the period (Naira per share) - 122,82
Summary statement of cash flows for the period ended 31 March
Three month Three month
period ended period ended
March March
2018 2017
Nm Nm
Net cash generated from operating activities 20 808 59 488
Cash generated from operations 114 110 95 347
Dividends paid to equity holders of the company (38 613) -
Dividends paid to non-controlling interests - -
Dividends received from associates and joint ventures - -
Income tax paid - -
Other operating activities (54 689) (35 859)
Net cash used in investing activities (77 297) (94 688)
Acquisition of property, plant and equipment (56 254) (41 083)
Acquisition of intangible assets (884) 708
Increase in non-current investments - -
Realisation/(purchase) of bonds, treasury bills and foreign deposits (19 078) (57 659)
(Increase)/decrease in restricted cash (1 248) 3 175
Movement in other investing activities 166 172
Net cash (used in)/from financing activities 44 505 (1 810)
Proceeds from borrowings 74 839 7 449,52
Repayment of borrowings and interest (30 334) (9 259)
Net (decrease)/increase in cash and cash equivalents (11 984) (37 009)
Net cash and cash equivalents at beginning of the year 89 565 146 369
Exchange losses on cash and cash equivalents (817) (782)
Net cash and cash equivalents at end of the year 76 764 108 578
Historic 2016 and 2017 full year financials are available on MTN Group's website (www.mtn.com)
Date: 07/05/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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