Global Economic Outlook (G.E.O)
MTN Nigeria Delivers Strong Half-Year Results. Vol. 100. August 1, 2022
Dear readers, welcome to another edition of the Global Economic Outlook (G.E.O) - our weekly newsletter providing insights on finance, investment and the economy. Today’s edition is the 100th edition and we will be discussing MTN Nigeria’s stellar half year financial performance.
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MTN Nigeria Delivers Strong Half-Year Results
Telecommunications giant, MTN Nigeria, has delivered another strong performance in the first half of 2022 declaring revenues of N947.9 billion ($2.23 billion) and profit after tax of N181.6 billion ($426.29 million). The profit after tax is actually higher than for the same period in 2021 by 28.1%.
MTN Nigeria’s performance is all the more impressive when you consider the tough economic climate including high inflation, rising energy cost, foreign exchange challenges, among a host of many others.
A further breakdown of the results show that the strong performance was driven by the increase in the number of active data users by 2.5 million subscribers (13.2% increase on previous year), increase in the number of mobile subscribers by 5.7 million as well as the increase in the number of active FinTech subscribers.
MTN Nigeria’s FinTech subscriber base is powered by their subsidiary, Momo PSB, which was recently licensed by the Central Bank of Nigeria (CBN) as a Payment Service Bank. The number of registered wallets has already hit 4.2 million since it was launched in May 2022. It is important to state that the FinTech business also presents new risks to the business and the company already got a taste of it after they launched. The PSB was defrauded by up to the tune of N22.3 billion ($52.35 million) but the company seems to have put everything under control and are already trying to get a court order to recover funds from other banks.
Another interesting metric in MTN Nigeria’s performance is the amount of money the company spent on Capital Expenditure (CAPEX). The company spent N311.6 billion ($731.46 million) on CAPEX in the first half of 2022 which is an increase of 67.1% on the corresponding period for 2021. This is impressive as it means that the company is making the required investments to position themselves for long-term growth. The company says the CAPEX was to increase the reach of their 4G network which now covers 75.3% of the Nigerian population compared to 65.1% in the same period of the previous year.
Shareholders also get a taste of the impressive performance of the company as MTN Nigeria has declared interim dividends of N5.60 per share, which is a 23.1% increase compared to that declared for 2021. It also means that the company has continued its tradition of declaring dividends twice in a year. Dividend increase is surely a good sign for potential investors.
As with every business, there are also risks to MTN Nigeria’s business with the major one being regulatory. There is also the risk of a new business, which is evident in the fraud attempt at their newly launched PSB. However, the company is clearly well managed and is well positioned to capture more value in the Nigerian market for the foreseeable future.
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The 8th Live Edition of the Global Economic Outlook (G.E.O) was held on Tuesday, 28th June 2022 with experts discussing the state of the Nigerian economy and how Small and Medium Scale Enterprises (SMEs) can navigate the difficult business environment. It is a must watch!
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