NIGERIA – MTN Nigeria Plc, Nigeria’s largest telecommunication service provider has recorded a 4.7% profit due to the high costs incurred during the COVID-19 period.
MTN Nigeria’s financial results showed that the telecom’s after-tax profit dropped to N94.88bn (US$250 million) for the half-year ended June 30, 2020 from a high of N99.537billion (US$262.61 million) reported in 2019.
The telco’s profit before tax stood at N139.570bn (US$368.26 million) a two percent drop when compared to the N142.404bn (US$375.73 million) which was recorded in 2019.
The drop in revenues was recorded despite MTN Nigeria recording a 12.5% increase in revenues.
MNT Nigeria’s H1 2020 revenues rose to N637bn (US$1.68 billion) in 2020, a notable improvement when compared to N566.9 billion (US$1.50 billion) reported in the same period last year.
MTN said that the 12.5 per cent revenue increase was driven by growth in data revenues in the first and second quarters of the year.
The telecom further reported a 57.6 per cent growth in data revenue in the half-year of 2020 as its Nigerian customers bought more data in the during Covid-19 economic shutdown.
While releasing the financial results, MTN Nigeria Chief Executive Officer, Ferdi Moolman explained that the company’s strong performance during the difficult economic times was made possible by a strong growth in the company’s key revenue lines.
Apart from the revenue from data, MTN also recorded tremendous gains in revenues from digital and fintech services.
According to MTN Nigeria CEO, “revenue from digital and fintech services rose by 121.8 per cent and 29.6 per cent, respectively.”
The CEO further noted that voice revenue growth was 2.8 per cent amidst a change in traffic pattern following the lockdowns.
Fedi Moolman however, noted that despite the company’s impressive performance during the difficult first half of the year, it recorded a decline in profits due to increased costs.
According to Moolman, the company prioritized the upgrade of its network capacity to accommodate growth in traffic, while continuing to expand 4G network coverage, albeit at a slower pace given the constraints presented by COVID-19.
This upgrades and expansions resulted in increased costs of operations forcing the profits to plummet by 4.7 percent.
MTN was however glad that despite the rising costs, the telco was able to achieve 6.8 million in net additions, increasing the total number of subscribers in the telecom’s network to 71.1 million customers.
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