MTN Nigeria Records N65bn Profits


June 10, 2005/Source ThisDay


MTN Nigeria Communi-cations Limited (MTN) has announced a pre-tax earning of N65 billion on revenue of N199 billion for the period April 1, 2004 to March 31, 2005. 

Over the same period, the mobile telecommunication company said its subscriber base also increased by 123 per cent while a capital investment of over N118 billion was completed.

MTN Group, for the second year running, beats its South African rival and a bigger network operator. Vodacom. MTN Group grossed R29bn (or $4.297bn) as against Vodacom’s R27.3bn (or $4.04bn).  Both results are for the year ended March 31, 2005.

MTN Nigeria contributed R9.3billion (about $1.3bn) to the Group’s revenues just as the Group made a profit after tax of  R7.3bn (or $1.08bn).

Commenting on the results, the Chief Executive Officer of MTN Nigeria, Mr. Sifiso Dabengwa was quoted as saying that “the impressive result justifies our strategy of reinvesting every kobo realized into the business to enable us achieve our sustainable business and target roll out plan”

Vodacom, the older of the two networks currently has 15.5 million subscribers against MTN which has 14. 3 million subscribers.

In South Africa where it released its results yesterday, MTN said its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 33 percent to R12 or ($1.78 Bn).

The Company said of the results, “MTN Group continued its strong growth trend during 2005 financial year achieving an increase of 45 percent in Adjuster Headline  earnings per share (Adjusted Headline EPS) to 366,6 cents. The group lifted consolidated revenues by 21 percent to R50 Billion on the strength of a 50 percent increase in its total mobile subscriber base to 14.3 million at 31 March 2005.”

The Group said the Adjusted Headline EPS excluded “the beneficial financial impact of the deferred tax asset recognised by MTN Nigeria.”

The contribution of the Group’s international operations to overall Group results increased slightly to 39 percent of revenue, 50 percent of EBITDA, and 44 percent of Adjusted Headline EPS.

The Group noted that the naira against which the Rand strengthened by 17 percent on average over the 2005 financial year compared with the average rate for the previous year.

“Consequently, the strong revenue and earnings growth achieved by MTN Nigeria was somewhat muted in the Group’s financial results when translated into the rand.”

MTN Nigeria’s operations remain the core of the Group’s international operations. Of the Group’s total expenditure for the year, MTN Nigeria invested R5.5 Bn or 72 percent of the group’s total expenditure. It was described as a record for any operation in the Group.

The Nigerian blended Average Revenue Per User (ARPU) decreased by $11 from $51 in 2004 to $40. MTN envisaged that the decrease in ARPU would continue.
South Africa continues to lead in the Group’s operations with a total of 8 million subscribers. This figure is against Vodacom’s 12.8 million subscribers in South Africa. 

MTN South Africa controls between 38 to 39 percent market share against Vodacom’s 56 percent. The South African operation recorded an increase in revenue of 17 percent to R17.8 Bn.

MTN international operations contribution to the Groups total revenue increased to about 39 per cent. Analysts see this as the reason Vodacom is still showing so much keen interest in the Nigerian market.

Although it continued to enjoy tax holiday in Nigeria, MTN Nigeria said in the period under review, it made payments in excess of N34.8b in the form of taxes, duties, license fees and similar statutory payments to government at different levels. It also paid N14.2b in import duties and N9.8b in VAT.

The Nigerian subsidiary also said it has surpassed the initial $1.4 billion investment plan and invested over $1.8 billion into the building of mobile telecommunications infrastructure.

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