MTN reports N205bn PAT in 2020, proposes N5.90 Interim Dividends
MTN Nigeria Plc, has posted a Profit After Tax (PAT) of N205.2 billion as against N203.2 billion in its audited financial report ended December, 2020, representing an increase of 12.8 percent.
The firm, whose financial reports is in line with the International Financial Reporting Standards (IFRS) has proposed an interim dividend of N5.90 to its shareholders, subject to their approval at the company’s Annual General Meeting (AGM) billed to hold very soon.
MTN disclosed in a statement sent to the Nigerian Stock Exchange (NSE) Monday that its revenue for the Group was N1.3 trillion as against N1.1 trillion, recorded for 2019. This represents a 14.7 percent increase. The Group’s result also shows other income of N685.7 billion as against its previous N96.92 billion.
The Profit before tax for the period under review stood at N298.9 billion as against N290.1 billion recorded in the corresponding period, representing a 2.6 percent increase.
The company’s operating costs, including finance cost was up by 24.5 percent in 2020 from N125.33 billion recorded in 2019.
Its Earning Per Share (EPS) rose by 0.9 percent to stand at N10.1 million, while mobile subscribers increased by 12.2 million to 36.6 million. The firm also reported an increase in its active data users which inched up by 7.4 percent to 32.6 million.
The Chief Executive Officer, MTN Nigeria Plc, Mr. Ferdi Moolman, said the company was able to achieve this performance despite the unprecedented disruptions that COVID-19 pandemic caused businesses globally.
He stressed that as the impact of COVID-19 shall continue to evolve, the company would leverage its data and digital services for optimal output.
According to the MTN Nigeria boss, the company navigated the fallout of the pandemic and adapted processes and structures to the new realities to support the national response in a holistic way.
“This was encapsulated in our Y’ello Hope Initiative through which we provided support to our broad base of stakeholders to the value of approximately N25 billion,” Moolman said.
In a research report released by CardinalStone, the most valuable telecom company’s margin was adversely affected by currency devaluation.
“Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.
“On the former, we note that MTN Nigeria expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously).
“Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7per cent,” the report stated.
The company’s margin was also negatively affected by the higher cost of borrowing and the ultra-low rates prevailing at Nigeria’s debt market;
“Net finance cost increased by 25.4 per cent YoY on the impact of higher borrowings and lower interest on investment in government securities.
“Borrowings rose by over 26.3per cent to N521.2 billion in FY’20, after the company notably issued its N100 billion Commercial paper in June 2020. The effect of higher borrowings combined with a tax increase (a consequence of lower investment allowance and exempt income) to keep after-tax profit growth subdued at 0.9per cent YoY.”
