MTN records Q3 growth despite ongoing difficulty in Nigeria

Despite ongoing conflict with the Central Bank of Nigeria (CBN) and the Attorney General of the Federal Republic of Nigeria (AGF), MTN Nigeria experienced "an excellent quarter" according to the Group's quarterly update for the period ended 30 September 2018.

According to its update, MTN Nigeria increased service revenue by 17.4% year-on-year, led by a 52.5% increase in data revenue and 21.5% increase in outgoing voice revenue.

The company said various CVM and OEM-partnership initiatives drove up the number of active data subscribers (17.2 million) and smartphones on its network.

"The EBITDA margin expanded to 43,2% in the first nine months of the year, up 4,7 percentage points from end- September 2017, driven by the strong growth in revenue, mix of revenue and further cost optimisation efforts," read the statement.

The company added that MTN Nigeria's plans to list "have been challenged" by the CBN and AGF allegations.

According to the Group, during the quarter CBN alleged improper dividend repatriations by MTN Nigeria between 2007 and 2015 of US$8,1 billion, while the AGF alleged unpaid taxes on foreign payments and imports of approximately US$2,0 billion.

MTN Nigeria has denied the allegations and stated: "To protect MTN Nigeria's assets and shareholder rights within the confines of Nigerian law, we applied in the Federal High Court of Nigeria for injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders, while we continue to engage with the relevant authorities on these matters. We remain resolute that MTN Nigeria has not committed any offences and will continue to defend this position vigorously."

"Shareholders are referred to the cautionary announcement dated 30 August 2018 and the subsequent renewal of cautionary announcements, the latest of which was released on 23 October 2018. Shareholders are advised to continue to exercise caution when dealing in the company's securities until a further announcement is made."


In early October 2018, Reuters reported that the West African country's information minister had said the company and CBN were close to resolving the issue. According to the report, MTN's shares lost a fifth of their value since the Nigerian central bank ordered the firm and the four banks involved (Standard Chartered, Stanbic IBTC Bank, Citibank and Diamond Bank) to bring back the funds on 29 August 2018.

Rob Shuter, MTN Group president and CEO, said, "MTN recorded an improved operational performance in many markets in the third quarter. Group service revenue grew by 10,0% year on year, ahead of our medium-term target of upper-single-digit growth, supported by continued strong growth in voice and data revenue. These results were delivered in challenging operating and currency conditions. Group outgoing voice revenue increased by 5,2% and data revenue increased by 23,9%. Higher digital revenue was led by robust growth in MTN Mobile Money."

"The group benefited from the particularly strong performance of operations in Nigeria and Ghana, while some operations in our West and Central Africa (WECA) region remained under pressure."

MTN South Africa recorded YoY service revenue growth of 3,0%, edging closer to our medium-term target of midsingle-digit growth. Data and digital revenue increased by 12,5% and 9,9% respectively, while outgoing voice revenue declined by 8,4%.

"In a weak economy, consumers felt the pressure of a higher VAT rate, becoming increasingly price sensitive. Prepaid service revenue increased 0,5% and postpaid service revenue increased by 1,9%," the company stated.