MTN - Summary of MTN Nigeria consolidated audited results for the year ended 31 December 2019:
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
(Share code MTN)
(ISIN: ZAE000042164)
("MTN" or "MTN group")
Summary of MTN Nigeria consolidated audited results for the year ended 31 December 2019
Salient features:
* Mobile subscribers increased by 6.1 million to 64.3 million
* Active data users increased by 6.5 million to 25.2 million
* Service revenue increased by 12.6% to NGN1.2 trillion
* EBITDA grew by 45.2% to N629.9 billion (IAS 17: 20.9% to N524.4 billion)
* EBITDA margin increased by 12.1 pp to 53.9% (IAS 17: 44.8%, up 3.0 pp)
* Profit before tax grew by 31.1% to N290.1 billion (IAS 17: 39.9% to N309.6 billion)
* Earnings per share rose by 38.8% to N9.9k (IAS 17: 47.9% to N10.6k)
* Capital expenditure (capex) (excluding right of use assets) increased by 13.1% to N208.3 billion
* Final dividend of N4.97 kobo per share recommended
Unless otherwise stated, financial and non-financial information is year-on-year (YoY, full-year 2019 versus 2018). In
January 2019, MTN Nigeria adopted IFRS 16 and adjustments are reflected in the results.
MTN Nigeria Communications Plc (MTN Nigeria) is one of Africa's largest providers of communications
services with a clear vision to lead the delivery of a bold, new digital world. We announce our audited
results for the full year ended 31 December 2019.
MTN Nigeria CEO, Ferdi Moolman comments:
"I am pleased with our performance in 2019, which demonstrates the progress we have made in the
implementation of our BRIGHT strategy. Despite a challenging operating environment, we continued
to deliver double-digit growth in service revenue in line with our medium-term guidance. Voice revenue
growth remained healthy, and data revenue continued to accelerate, supporting a 12.6% increase in
service revenue with an acceleration in growth to 14.0% YoY in Q4 2019.
Following the completion of the SIM re-registration exercise in Q3 2019, we recorded 2.7 million net
additions in Q4. In total, we added 6.1 million new subscribers to our network in 2019. Although the
last quarter is usually seasonally strong, service revenue growth (14.0%) in Q4 outpaced the seasonal
effect.
In the third quarter, we focused on several initiatives to enhance coverage and drive data usage
penetration. These initiatives include optimising frequencies, expanding our 4G network coverage with
over 6,000 additional sites leveraging 800MHz spectrum and repositioning our commercial data
offerings.
It is pleasing to note that the promising results we reported at the end of Q3 2019 accelerated in the
fourth quarter. Corresponding with the increase in our active data subscriber net additions by
2.9 million in Q4 2019, our 4G population coverage rose by 8.4 pp to 43.8%, giving people in 68
additional cities access to 4G. We closed the year with 132 cities covered by 4G and became the first
mobile network operator in West Africa to demonstrate the capability of 5G technology. We are excited
about its potential for our customers and Nigeria's overall national development plans.
At 20.9% on an IAS 17 basis (45.2% on reported IFRS basis), our earnings before interest, taxation,
depreciation and amortisation (EBITDA) rose at a rate in excess of revenue growth and we recorded
an EBITDA margin of 44.8% (53.9% on reported IFRS basis). Our reported profit before tax rose by
31.1%, while profit after tax and earnings per share both rose by 38.8%. In line with our dividend policy,
the board has proposed a final dividend of N4.97 kobo per share to be paid out of distributable net
income. This brings the total dividend for the year to N7.92 kobo per share.
We are delighted with the progress made in resolving our dispute with the Attorney General of the
Federation (AGF) on the adequacy of taxes and duties paid. We have discontinued the legal action
against the AGF following the transfer of the matter to the relevant authorities and look forward to a
final resolution. We have always fulfilled our tax obligations and remain committed to maintaining
good relationships with all regulatory authorities.
Finally, we achieved a major milestone in the history of MTN Nigeria with the conversion from a private
company to a public limited company and the subsequent listing on the premium board of the Nigerian
Stock Exchange, which has led to a broader base of Nigerian shareholders for the company."
Operational review
During the year, we focused on building our subscriber base, resulting in growth of 10.5% in net
additions to a total of 64.3 million subscribers. Our active data subscribers rose by 34.9% to
25.2 million on the back of several initiatives. As a result, the ratio of active data users to total mobile
subscribers increased by 7.1 pp to 39.2% in 2019 with strong potential for future growth.
Voice revenue growth remained healthy at 8.4% and accounted for 72.7% of service revenue. Voice
traffic increased by 7.6%, supporting revenue growth.
In addition, we have seen rapid acceleration in data revenue growth enabled by greater population
coverage, a revamp of our data portfolio and initiatives to drive 4G device penetration. We added 5.3
million new smartphones to our network, bringing smartphone penetration to 41.8% of our base,
while data traffic rose by 85.8%. Our interventions in the year helped to drive a 42.4% increase in data
revenue for the year (63.1% YoY in Q4 2019). Data contributed 18.8% to service revenue, up 3.9 pp
from 14.9% in 2018.
Digital revenue gained momentum as we started to see quarterly growth from Q3 2019. We further
focused on building a sustainable active user base for our digital business, while improving the
customer journey and experience on value-added services (VAS). In Q4 2019, we launched MusicTime,
one of our flagship digital offerings. The active base for our digital subscriptions surpassed 2.1 million
users during the year, as we continue to build critical mass for our portfolio of digital products and
services. On a sequential QoQ (quarter-on-quarter, Q4 19 vs Q3 19) basis, digital revenue increased
by 23.0% and we target sustained growth into 2020.
Fintech revenue growth was 23.3%, supported by increased adoption of MTN Xtratime, our airtime
lending service. We launched a super-agent service in August and are pleased with the initial rollout
and uptake of the service. We closed the year with a network of 108,000 agents registered nation-
wide. The agent network served almost one million customers in the first four months of operation,
and we are maintaining our focus on further expansion. To cater to a broader market and encourage
further adoption, we are also widening the service offering - from basic transfer service and
airtime/data sales to a more extensive bouquet, including cash deposit and withdrawal services, bill
payments and facilitating e-commerce.
Our enterprise business segment continued to deliver solid results, with revenue growth of 20.3%.
On the cost side, the increase in operating expenses on an IAS 17 basis was 4.4%, which was below
the rate of inflation. This reflects progress with our cost management initiatives and reduction of non-
recurring expenses. We maintained our leadership position in network net promoter score (NPS) as
we continued to invest to improve service quality and drive 4G expansion. This resulted in a 13.1%
increase in capital expenditure and capex intensity of 17.8% on an IAS 17 basis. Our overall cash flow
performance was pleasing, with a 26.6% growth in free cash flow to N316.1 billion (IFRS 16: 51.4% to
N378.0 billion).
Overall, our bottom-line remained strong with growth of 31.1% and 38.8% respectively in profit before
and after tax. Earnings per share increased by 38.8% to N9.9k.
IFRS 16 and IAS 17 comparison
IFRS 16 IAS 17 IAS 17 IFRS 16 IAS 17
2019 2019 2018 Growth Growth
N'm N'm N'm % %
Opex 321.1 426.6 408.5# -21.4% 4.4%
EBITDA 629.9 524.4 433.9# 45.2% 20.9%
EBITDA margin % 53.9% 44.8% 41.8% 12.1pp 3.0pp
Capex 251.9 208.3 184.2 36.8% 13.1%
Capex intensity 21.5% 17.8% 17.7% 3.8pp 0.1pp
Free Cash flow 378.0 316.1 249.7 51.4% 26.6%
Profit before tax 290.1 309.6 221.3 31.1% 39.9%
Profit after tax 202.1 215.3 145.6 38.8% 47.9%
EPS (N) 9.9 10.6 7.2 38.9% 47.9%
# Includes N19.2 billion notional reversal payment to CBN. Excluding it, operational expenditure grew by 9.6% (IAS 17) and declined by 17.5%
(IFRS 16); while EBITDA grew by 15.7% (IAS 17) and 39.0% (IFRS 16)
Outlook
We are optimistic about the prospects for our business in 2020 and pleased with the continued
momentum from H2 of 2019, and particularly Q4. Expanding 4G network coverage to deliver high-
speed internet to more people nation-wide and data revenue growth remain in focus. We expect
growth in voice revenue to remain healthy. We continue to make good progress with the expansion
of our super-agent network and are confident that the expanded service offerings will position us to
effectively drive broader financial inclusion as well as roll out the payment service bank seamlessly,
once we receive a licence.
We acknowledge the outbreak of Corona Virus worldwide and its potential impact on our supply chain.
While we monitor unfolding developments, we are exploring multiple scenarios in a bid to mitigate
the impact.
Over the next three years, we plan to invest about N600 billion in our network. This investment will
enable us to accelerate our 4G network expansion, deepen population coverage and support the
Federal Government's broadband initiative. We are excited about the possibilities that the transition
to digital presents for our business, and the growth and development of Nigeria.
This announcement is only a summary of the information in the full announcement and does not
contain full or complete details. Please visit https://mtnonline.com/about-us/investors/financial-
reporting/annual-results/ for the full set of audited results for the year ended 31 December 2019.
Fairland
2 March 2020
Lead sponsor
Tamela Holdings Proprietary Limited
Joint sponsor
JP Morgan Equities (SA) Proprietary Limited
Date: 02-03-2020 07:05:00
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