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MTN Group, a pan-African telecommunications corporation run by Zimbabwean senior executive Ralph Mupita, has announced a double-digit fall in its basic earnings (profit after tax) by the end of 2021, despite rapid Internet penetration in Africa, which has resulted in a surge in revenue.
According to its 2021 financial statement, its profit after tax at the end of 2021 declined 13.5 percent from R19.65 billion ($1.29 billion) in 2020 to R16.99 billion ($1.11 billion), owing to an increase in operational expenditures and selling and marketing costs, despite a jump in sales.
In addition to growing operational expenses, earnings were hurt by an impairment loss of R453 million ($29.8 million), mostly related to MTN Yemen, and deconsolidation losses of R4.72 billion ($320.8 million), primarily related to MTN Syria.
In constant currency terms, the group’s total revenue increased by 17.6 percent, while service revenue increased by 18.3 percent, driven by growth in most of its operations, including a 6.5-percent increase in South Africa and increases of 23.2, 9.3 and 28.6 percent in Nigeria, Uganda, and Ghana, respectively.
Voice revenue climbed by 5.2 percent across all markets, fueled by a 3.3-percent rise in voice traffic, as well-executed customer value management efforts and segmented customer propositions continued to underpin voice growth.
On the other hand, its data income increased by 36.5 percent, owing to a 53.3-percent growth in data use to 6.4 gigabyte per user a month, driven by Africa’s rapid embrace of the Internet.
Despite a double-digit fall in basic earnings (profit after tax), Mupita, CEO of MTN Group, said the company’s 2021 financial performance will be supported by satisfactory growth in its major operational firms, operating leverage and the advantages of its expenditure optimization initiative.
He also stated that headline profits per share adjusted for non-operational factors climbed by 26.6 percent, return on equity improved by 2.6 percentage points to 19.6 percent, and organic operating cash flow increased by 35.2 percent to R38.3 billion ($2.52 billion).
As of press time on March 9, shares in the telecommunications powerhouse were selling at R194.04 ($12.78), giving the firm an R352-billion ($23.2 billion) valuation on the Johannesburg Stock Exchange.
