Sustained growth in revenue

Fintech revenue rose by 57.3per cent due to sustained growth in the use of our Xtratime product and broader FinTech services by our customers.

MTN Nigeria expanded its MoMo agent network, through one distribution strategy, with the addition of over 374k registered agents bringing the total number to approximately 770k, up 94.8per cent.

As a result, transaction volume rose by 167.0per cent to 137.5 million from an active user base of 9.4 million, up 102.0per cent.

Additionally, the Approval in Principle recently obtained in relation to MoMo PSB licence application is an important step towards final approval, which will allow the company to expand service offerings and scale FinTech business, thereby achieving more meaningful financial inclusion in the country.

Increased customer base

Digital adoption continues to accelerate as customers use more digital products and services, a trend accelerated by COVID-19.
As a result, digital revenue grew by 61.2per cent as the active user base grew and penetration of its digital products deepened. The active user base rose by 162.1per cent to 7.5 million, led by Ayoba.

However, Cost of Sales by 10.5 per cent to N271.88billion in 2021 from N246.11billion recorded in 2020 as Operating expenses gained 21.9 per cent to N505.3billion in 2021 from N414.6billion in 2020.

Net Finance cost grew by 15.8 per cent to N148.06billion in 2021 from N127.84billion reported in 2020. The telecommunication company reported N138billion tax income in 2021, an increase of N93.66billion reported in 2020.

This positioned its profit after tax to N298.65billion in 2021, an increase of 45.5 per cent from N205.2billion reported in 2020.
The management of MTN Nigeria has proposed a final dividend of N8.57 kobo per share, brings the total dividend for the year to N13.12 kobo per share, representing an increase of 39.6 per cent. The company in 2020 had declared a final dividend of N5.90 kobo per share, bringing the total dividend for 2020 at N9.40 per share.

Analysts Comments

The Chief Executive Officer, MTN Nigeria, Karl Toriola in a statement said: “2021 was a significant year for our Company. We commemorated our 20thanniversary with a celebration of our customers and all the stakeholder relationships that enabled our journey. In addition, we made good progress towards our Ambition 2025 objectives, demonstrating the strength and resilience of the business. This reflects the firm foundations on which our business is built, the tenacity and commitment of our people, and the support of our stakeholders.

“In line with our objective to share our Company’s success with our various stakeholders, the first phase of a series of transactions to increase Nigerian ownership in MTN Nigeria was conducted during 2021 by way of bookbuild to institutional investors and fixed price offer to retail investors (the Offer). The outcome of the Offer will be announced once regulatory approvals have been obtained.
“Operationally, our mobile subscriber base declined by 10.6per cent and was impacted by the regulatory restrictions on new SIM sales and activations. However, we are pleased to have returned to positive growth in Q4 2021, adding approximately 1 million subscribers as we continued to ramp up the alignment of our SIM registration and activation centres with the regulations.

“Active data subscribers rose by 5.3per cent YoY to 34.3 million as we continued to drive data conversion from our existing subscriber base. To enable this, we significantly enhanced our connectivity infrastructure with the acquisition of an additional 800MHz spectrum and the accelerated rollout of our 4G network, which now covers more than 70per cent of the population.

“Furthermore, we were successful in our bid to acquire a 100MHz spectrum licence in the 3.5GHz band, on which we will roll out 5G services, at the auction held in December 2021.

“5G provides the foundation on which future network performance will be built. Our successful bid presents an exciting opportunity to be at the forefront of delivering technological advancements to as many Nigerians as possible.

“Our fintech business continued to gain traction with approximately 770k registered mobile money (MoMo) agents and active users more than doubling to 9.4 million. This provides a solid foundation on which to launch the MoMo Payment Service Bank (PSB), for which we have received an Approval in Principle.

“The MoMo PSB will provide a powerful platform to drive digital and financial inclusion in Nigeria. In recognition of our progress in the fintech space, we received a $500,000 grant from the African Development Bank to fund research on financial inclusion for women.

“Driven by the strong operational performance, we delivered growth across all revenue lines, demonstrating the underlying strength and momentum of the business. Service revenue grew by 23.3per cent, exceeding our mid-teen target, driven mainly by growth in voice, data and fintech service revenue lines.”

On outlook, he added that: “We are focused on building on the platform of success laid in 2021. Our return to positive subscriber net additions in Q4 2021 establishes a solid basis for growth in 2022 as we ramp up gross connections through our rural connectivity drive and CVM initiatives. As part of our rural connectivity programme, we plan to connect approximately 2,000 new communities in 2022.

“We are seeing structurally sustained data growth. As a result, we are investing in network and information technology infrastructure, and have secured the relevant frequencies to meet the higher demand. This involves accelerating the expansion of our 4G coverage and providing home broadband to capture a significant share of market growth.

“We will commence the initial rollout of 5G services once the acquisition process is completed to further deepen broadband penetration in Nigeria, enhance customer experience and unlock new revenue streams.

“We will sustain our drive for cost management across the business through our expense efficiency programme and strengthen our operations and financial position to unlock efficiency and support margins. Although the availability of foreign exchange remains a constraint, we strive to minimise its impact on the business.”