January 26, 2022

SB-Accounting

Accounting + Finance Blog

MTN Q1 2021 Report. What you should know

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MTN, a telecommunications company listed in the Nigerian Exchange Group (NGX) recently released its quarterly reports. The Q1 for 2021 was released this week. Revenue and profit soar despite Nigerian Communication Commission (NCC) hult of new SIM card registration. Among other things. In this article, let’s see what you should know about this entity’s report.

Revenue

MTN revenue grew by 17.1 percentage point YoY to NGN 385,318 millions. This is when you compared it with Q1 2020 which was NGN 329,171 million. On a QoQ basis, there was a 4.0 percent increase in revenue. The company Q4 2020 report shows gross sales to be NGN 370,728 million.

This is not surprising! The Covid-19 pandemic has encouraged a new way of doing businesses. People now work from home and are getting paid for it. This is shown in the amount of revenue from data subscription which amounted to NGN 105,694 million. A 46.2 percent increase compared to Quarter 1 2020. However, voice revenue saw a growth rate of 8 percent.

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Profit

Profit also increases. Earnings before Interest Tax Depreciation and Amortization (EBITDA) increases by 19.2 percentage point YoY to NGN 204,550 million. On a QoQ basis, EBITDA went up by 8.9 percent. Its Q4 recorded 187,877 million Naira. Next, Profit before tax (PBT) grew to NGN 102,989 million. A 33.3 percent growth YoY. And 18 percent growth when compared with Q4 2020.

Profit after tax (PAT) was up by 42.5 percent YoY to 73,748 million Naira. This is also an addition from its Q4 earnings of 20.9 percent. Two things contributed to high PAT in the 2021 Q1 Report. The fall in net finance costs and increase in revenue contribute immensely to the growth of profit.

Fintech profit

There is much noise about Fintech and MTN is not letting any stone behind. The revenue from this stream increased by 28.5 percentage point YoY to 14,265 million Naira. On a QoQ basis, it rose by 14.3 percent. The second largest growth after data.

The increase was triggered by more users of MTN Xtratime and its MoMo agent network. According to the company, MoMo agent network rose by 54,000 to 449,146. In addition, the transaction volume processed during the quarter was over 24 million. This is more than 4X its Q1 2020. With a subscriber base of 4.6 million.

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Earnings per share

Its earnings per share (EPS) surpasses expectations. It hit 3.62 Naira per share in Q1 2020. A 29.8 recent jump from Q1 of 2020. EPS means the returns from investors shares. It reveals what investors gained from investing their funds in the entity. It also tells if the Board of Directors manages the resources with utmost care. The growth in EPS is encouraging.

Total Assets

MTN total Assets reached 2,185,743 million Naira (2.1 trillion) in Q1 2021 from 1,963,543 million in Q1 2020. This is a 10.2 percent increase YoY. It’s liabilities totalled 1,073,320 million. This means that the company can pay up its liabilities in any unexpected event.

Conclusion

On a final note, MTN has a good outlook for the quarter under review. This is in terms of the parameters used. But, some other parameters like gearing ratio which measure if an entity is financed more by debt or equity is not encouraging. When measured within the company. However, industry analysis needs to be done to make better decisions from this ratio. Generally, it can be said that the company is doing well.

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