MTN Nigeria’s Q1 2021 Financial Result is impressive, but…

Although MTN Nigeria Communications Plc reported an impressive 42.5% increase in its Q1 2021 profit after tax, it still had a few issues to worry about. Said worries stemmed from the dramatic declines in the telco’s mobile subscribers and active data users, as you shall see shortly.

An Overview of MTN Nigeria’s Q1 2021 Financials

Chief Executive Officer, Karl Toriola, wasn’t wrong when he commented on the company’s Q1 financial performance saying: “We made good progress in the first quarter of 2021 despite the continued impact of the COVID-19 pandemic.” This is because total revenue for the period increased significantly by 17.2% to N385.1 billion, up from N328.5 billion during the comparable period last year. Similarly, profit after tax surged by 42.5% to N73.7 billion when  compared to N51.7 billion in Q1 2020.

Also, MTN Nigeria’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for Q1 2021 stood at N204.5 billion. Checks by Business Elites Africa showed that this represents a 19.1% increase compared to the N171.8 billion EBITDA the company reported in Q1 2020.

But NCC’s new SIM Card Policy Affected MTN’s Operations and Financials 

However, the leading telco’s mobile subscribers declined by a whooping 5 million to 71.5 million during the period under review. One of the reasons that was given for this decline is the fact that the long-standing restriction by the National Communications Commission (NCC) on new SIM card registration and activation had affected MTN’s ability to register new subscribers.

As expected, the restriction on new SIM card activation inevitably had an adverse impact on MTN Nigeria’s active data subscribers, causing it to decline marginally by 71,000 to 32.5 million. But just as CEO Kari Toriola pointed out, these challenges did not stop the company from recording an impressive growth. He also noted that MTN will continue to work with the NCC and the National Identity Management Commission on the SIM card NIN linkage mandate.

“Operationally, service revenue in Q1 grew by 17.2% YoY, in line with our medium-term target, supported by growth of 42.6% and 8.0% in data and voice revenue respectively. This was achieved despite the impact of the pandemic and a decline in our subscriber base due to the effects of customer churn and the restrictions on new SIM sales and activations arising from changes in SIM registration regulations. We continue to collaborate with the Nigerian Communications Commission (NCC) and the Nigerian Identity Management Commission (NIMC) to update subscriber records with the National Identity Number (NIN),” Toriola said.

You may download MTN Nigeria’s Q1 2021 financial statement by clicking here.