MTN raises Capex to N105.8 billion, EBITDA by 40% in six months.

MTN Nigeria has raised its Capital Expenditure (Capex) by 63.8% to N105.8 billion while its EBITDA grew by 40.0% to N304.9 billion.

As contained in its unaudited result for the six month ended 30 June 2019, “MTN Nigeria delivered a solid performance, with strong voice (+11.4%) and data revenue (+31.7%) driving double-digit service revenue growth and further improving the margin on earning before interest, taxation, depreciation and amortization (EBITDA).

It was also noted that the EBITDA margin increased by 10.7pp to 53.8%.

According to the telecom operator, MTN Nigeria adopted IFRS 16 accounting standard in line with global best practice

Speaking on this, the Chief Financial Officer (CFO), Mr Adekunle Awobodu stated that on an IAS 17 bass, operating expenses increased by 9.7% below inflation.

“The 1.5pp improvement in the EBITDA margin was supported by a stable naira against the US dollars benefiting the operating expenses as well as lower digital expenses arising from our VAS optimization initiatives.

“Our bottom line remained strong with 30.9% (N141,797 million) and 34.8% (N98,931 million) growth in profit before and after tax respectively, while earning per share increased by 34.8% to 486 kobo”, Awobodu said.

More so, he noted that Voice revenue growth was supported by an increase in subscribers (+57%), 2.5 million smartphones. increasing smartphone penetration by 2.1pp to 39.2% Active data subscribers increased by 1 1.096 to 20.7 million and data traffic rose by 67% YoY.

“Our fintech business continued to gain momentum with 21.2% growth in revenue YoY, while our enterprise business also delivered satisfactory results with revenue increasing by 31.3% to contribute 11.9% to service revenue.

“However, our Focus is to build a sustainable base of active digital users in order to boost revenue growth”, Awobodu addressed.

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The MTN Nigeria CEO, Ferdi Moolman said, “We are pleased with obtaining a super-agent licence from the Central Bank of Nigeria, which will enable us to build an agent network and accelerate the growth of our fintech business.

“In May 2019, MTN Nigeria successfully listed on the Nigerian Stock Exchange (NSE) making us the first mobile network operator to list on the NSE. The listing demonstrates our commitment to the Nigerian market and provides local investors with an opportunity to participate in and benefit from the company‘s growth prospects”, Moolman pointed out.

According to a PwC survey “telecoms operators indicated that they could be wasting up to 20% or $65 billion/year in capex.

PwC’s research identified that many telecom operators find their current capex process to be a deeply flawed and frustrating experience. Nearly two-thirds say that capex is driven by technology, not business commercial objectives, a worrying trend in an increasingly competitive market.

“Telecom operators know they have a problem controlling their capital expenditure (capex)”, PwC noted.