Data leads MTN’s N1.65trn revenue in 2021

MTN Nigeria generated over N516 billion from data services in 2021, which led revenue growth for the year at an increase of 55 percent. The revenue line accounted for 31 percent of the company’s turnover of N1.65 trillion for the year, rising from 24.7 percent in the preceding year.

These are contained in the company’s audited accounts for the 2021 operations – which produced the fastest revenue growth for the company in five years. The company grew turnover by about 23 percent in the year, accelerating from 15 percent growth in 2020.

Data services have been the engine room for earnings growth for the telecommunications company for the past two years in reflection of the coronavirus-induced changes in the communication pattern of people and businesses.

Data revenue had grown by over 51 percent in the preceding financial year. The telecoms sector is in a beneficial position from the major shift to virtual activities in the aftermath of the coronavirus pandemic. MTN Nigeria, which leads the market, is converting the opportunity into earnings.

The contribution of data earnings to the company’s total revenue expanded from less than 19 percent at the end of 2019.

Conversely, the company’s main revenue line – airtime/subscription, has continued losing its revenue dominance. At N819.7 billion, it accounted for 49.6 percent of total revenue at the end of 2021, down from 57 percent in 2020 and from 62 percent in 2019.

Amidst the company’s changing income structure, it recorded improvements across its key income lines during the year. Earnings from airtime services improved by 7 percent while income from interconnect and roaming grew by 26.7 percent to nearly N168 billion.

Income from SMS multiplied by 276 percent to over N46 billion during the year and value-added services leapt by 52 percent to N70.6 billion.

Some revenue disappointments were equally recorded in the year though they happened in the less critical service areas. These include digital services, which went down by 51 percent to less than N18 billion and handset and accessories, which dropped by 60 percent to less than N3 billion.

MTN’s group profit grew by 45.5 percent in the year to close at N298.6 billion for the 2021 operations. This is almost twice as fast as the growth in the company’s turnover. It is against a marginal improvement in after tax profit at the end of 2020 when the company closed with a profit of N205 billion.

The strength to grow profit that much came from both the gains in revenue as well as cost savings that stretched out the profit margin. Some major cost elements of the company slowed down relative to revenue and yielded cost savings that raised the ability to convert revenue into profit.

Among the moderated expenses are interconnect costs, which grew by 13.4 percent to N127.6 billion. Also, discounts and commissions grew by 14 percent to N78 billion while depreciation of property and equipment increased by 8 percent to N162.5 billion.

These and other costs claimed reduced shares of revenue, which permitted a strong growth of 37 percent in operating profit in the year to N584.7 billion.

Direct network operating cost – the company’s biggest expenditure line, however, failed to slow down. It grew ahead of turnover at 26 percent compared to 23 percent to stand at N390.5 billion at the end of the year.

Finance expenses also moderated at an increase of 11 percent to N160 billion at full year. This is a slowdown from an increase of 18 percent in the cost of finance to N144 billion in 2020.

The summary of the company’s cost-income balance in 2021 is that revenue grew generally ahead of costs, which improved profit margin.

Net profit margin increased from 15.2 percent at the end of the 2020 operations to 18 percent at the end of 2021. This is the main elevating factor for MTN Nigeria in the year.

The company closed the year with earnings per share of N14.67, up from N10.08 per share in 2020. It has announced a final cash dividend of N8.57 per share. This is upon an interim cash dividend of N4.55 per share.