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MTN Nigeria’s Q3 Profit Drops 3.3% Amid 13.9% Jump in Revenue

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MTN Nigeria Earnings

By Dipo Olowookere

The net profit of MTN Nigeria Plc suffered a 3.3 per cent decline in the first nine months of this year, the financial statements of the company have revealed.

The profit after tax went down to N144.2 billion as at September 30, 2020, from N149.2 billion it closed on September 30, 2019, the results indicated.

This decrease in profit came despite the double-digit growth recorded by the total revenue generated in the period under consideration, rising by 13.9 per cent to N975.8 billion from N856.6 billion.

An analysis of the major contributors to the earnings showed that voice accounted for N645.5 billion versus N628.3 billion, indicating a 4.2 per cent growth.

Business Post observed that data revenue increased by 57.0 per cent to N241.6 billion from N153.9 billion, digital revenue went up by 114.3 per cent to N6.7 billion from N3.1 billion, fintech grew by 28.3 per cent to N32.4 billion from N25.2 billion, while other service revenue went down by 13.1 per cent to N38.6 billion from N44.5 billion.

It was further observed that with 19.5 per cent rise in expenses to N478.0 billion from N400.1 billion, 9.1 per cent year-on-year jump in EBITDA to N497.9 billion from N456.4 billion and a 32.9 per cent increase in the net finance costs to N95.4 billion from N71.8 billion, the profit before tax slightly decreased by 0.6 per cent to N211.6 billion from N212.9 billion.

“The year 2020 has been challenging for everyone,” the CEO of MTN Nigeria, Mr Ferdi Moolman, said, adding that, “The COVID-19 pandemic was first reported in Nigeria during the first quarter of 2020 and the country has, to date, registered over 62,000 cases and over 1,100 deaths according to the Nigeria Centre for Disease Control (NCDC).”

He noted that, “Through all these, we recognise that we must keep rising the best way we have learnt to do, which is together. That is why our priorities have remained focused on continuing to provide and invest in a network that brings people together and provides a platform for everyone’s voice to be heard.”

“During the period under review, we saw volatility in both voice and data revenue, affecting the trajectory of our overall service revenue, as well as pressure on costs, which continues to impact our operating margins, dampening profitability,” Mr Moolman stated.

“Following a decline in voice traffic and an acceleration in data during lockdowns in Q2, we have seen a normalisation of traffic as restrictions have been removed, with a recovery in voice traffic and continued growth in data. This has supported a 13.9 per cent growth in service revenue, with an acceleration of growth to 16.5 per cent in Q3 specifically,” he added.

However, he assured that the company will “continue to build on our operational and financial resilience and execute on our strategy to position the business for sustained growth over the medium and long term.”

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

NGX Gains 0.75% as FBN Holdings Sustains Aggressive Buying Momentum

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ATS Training NGX

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited appreciated by 0.75 per cent on Friday as the local demand for FBN Holdings Plc stocks was sustained during the final trading day of the week.

This raised the All-Share Index (ASI) by 308.17 points to 41,438.15 points from 41,129.98 points and as for the market capitalisation, the listing of 1.964 billion shares of NGX Group Plc shares on the exchange yesterday expanded it by N193 billion to N21.625 trillion from N21.432 trillion.

The market breadth closed positive yesterday with eight declining stocks and 30 appreciating equities led by SCOA Nigeria, which rose by 9.20 per cent to 95 kobo and was trailed by Custodian Investment, which grew by 8.96 per cent to N7.30, International Breweries went up by 8.70 per cent to N5.00, FBN Holdings rose by 8.09 per cent to N12.70, while GlaxoSmithKline grew by 6.56 per cent to N6.50.

On the flip side, Chams depreciated by 8.33 per cent to 22 kobo, University Press fell by 6.25 per cent to N1.50, Lafarge Africa declined by 4.74 per cent to N24.10, Africa Prudential lost 3.62 per cent to trade at N6.65, while Sterling Bank dropped 3.18 per cent to N1.52.

During the trading session, the trading volume fell by 19.72 per cent to 729.0 million units from 908.1 million units, the trading value dropped 22.25 per cent to N8.5 billion from N11.0 billion, while the number of deals declined by 5.80 per cent to 4,852 deals from 5,151 deals.

FBN Holdings sustained its aggressive buying momentum on Friday and emerged as the most traded stock at the close of transactions with a turnover of 476.5 million units transacted for N    5.9 billion.

Universal Insurance exchanged 39.7 million stocks worth N8.3 million, GTCO traded 33.2 million equities valued at N972.4 million, Fidelity Bank transacted 21.9 million shares worth N59.8 million, while Transcorp sold 20.8 million stocks valued at N20.4 million.

Business Post reports that the five main sectors finished positive yesterday with the consumer goods index rising by 0.91 per cent. The energy sector gained 0.86 per cent, the insurance counter rose by 0.84 per cent, the industrial goods space went up by 0.75 per cent, while the banking sector appreciated by 0.34 per cent.

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Economy

FG Urges UK to Ease Restrictions, Tariffs on Nigerian Businesses

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Nigerian businesses

By Sodeinde Temidayo David

The Minister of Industry, Trade and Investment, Mr Adeniyi Adebayo, has called on the United Kingdom to address the challenges faced by Nigerian businesses, especially with regard to restrictions and tariffs.

This was revealed at the 6th ministerial meeting of the UK to Nigeria Economic Development Forum (EDF) held virtually on Friday, October 15.

The minister in his words stated, “Inasmuch as we are flexible and committed to facilitating UK business concerns, we also request that the UK should continue to reciprocate and address the challenges faced by Nigerian businesses, especially with regard to restrictions and tariffs.”

Mr Adebayo also expressed optimism that as the impact of the COVID-19 pandemic eases on economies, efforts towards building the capacity of Small and Medium Enterprises to attain relevant certifications for export to the UK and the European Union (EU) markets will be prioritised.

He stressed the importance of the trade policy relationship between the two countries and pointed out that work was in progress towards reviewing Nigeria’s trade policy document to reflect the current realities.

He further commended the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed and the Comptroller-General of Customs, Mr Hameed Ibrahim Ali for being proactive in improving trade facilitation for UK businesses in Nigeria.

“It is my hope that the UK remains committed to facilitating deliberations for the purpose of addressing issues raised at the 4th Business Dialogue,” he added.

Following the agreements resulted in the forum, the minister noted the need to revive the workstreams with timelines, which had been adopted in the past, as a means of keeping track of the country’s deliberations and commitments.

“I also encourage periodic stock-taking of our progress, to ensure that we are on course with committing to timelines and most importantly to ensure compliance with agreed decisions,” he said.

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Economy

Naira Gains 1.7% at Official FX Window as Devaluation Fears Quell

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Official FX Window

By Adedapo Adesanya

The Naira appreciated against the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange (FX) market by 1.7 per cent or N7 on Friday, assuaging fears that the currency will be devalued again.

The local currency sold for N415.07/$1 at the official FX window yesterday in contrast to N422.07/$1 it traded on Thursday, according to data obtained from FMDQ Securities Exchange.

The Nigerian currency had suffered a significant loss a day earlier after investors feared that the Central Bank of Nigeria (CBN) may be forced to devalue the Naira again.

Speaking at the Economic Sustainability Plan (ESP) earlier this week, Vice President Yemi Osinbajo had said there was a “need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply,” which was indicative of devaluation.

He progressed by saying that, “We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.”

He also lamented the lack of access to forex for the importation of systems and raw materials as one of the contributory factors of the current economic situation.

Although the Vice President has come out to say he did not call for a devaluation, the market had spurred to action but has now rebalanced.

At the final session of the week, a turnover worth $337.28 million was recorded as against $141.94 million published at the preceding session.

This indicated a $195.34 million or 137.6 per cent surge in the daily turnover of the specialised market that caters to the country’s investors and exporters.

However, the domestic currency closed flat against the American Dollar at N410.91/$1 at the interbank segment of the forex market on Friday.

Meanwhile, Bitcoin (BTC) continued a surge at the cryptocurrency market, trading at N34,900,200.01 after a 6.1 per cent gain as hopes grew that regulators in the United States would allow a futures-based exchange-traded fund (ETF), a move likely to open the path to wider investment in digital assets. It largely spurred a boost in the most popular digital currency and also robbed off on some others.

Tron (TRX) added 2.9 per cent to trade at N55.58, Dash (DASH) rose by 2.5 per cent to sell for N107,420.17, Binance Coin (BNB) made a 1.2 per cent appreciation to trade at N194,938.27, Litecoin (LTC) sold for N101,102.04 after rising by 0.4 per cent, while Ethereum (ETH) gained 0.3 per cent to trade at N2,174,753.84.

On the losing side, Dogecoin (DOGE) was 1.3 per cent down to sell at N133.66, Cardano (ADA) fell by 0.8 per cent to N1,254.12, the US Dollar Tether (USDT) moved downwards by 0.6 per cent to sell for N568.38, while Ripple (XRP) lost 0.3 per cent to trade at N644.01.

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