Over the first quarter this year, MTN Nigeria’s general expenses grew by nearly N29.2 billion ($75 million), weakening the company’s good performance over the period. The Nigerian subsidiary of MTN Group ended the period with a net margin of N51.1 billion compared to N48.8 billion in Q1 2019.

The company generated revenue of N321.9 billion, up 16.7%, thanks to a good performance in the call segment, but especially thanks to a 59.2% increase in the revenues of the Internet activity which represents 22.7% of the turnover.

Operating income increased by 18.6% to N111.3 billion. However, the pre-tax profit was impacted by the increase in financial charges due to higher borrowing (N250 billion in March 2019 and N410 billion in March 2020) resulting in a decline in pre-tax profit growth to only 8.9%. MTN Nigeria says it had no choice but to borrow because the resource allows it to carry out its investments with serenity.

The company's accounting options are quite complex. Its provisions on assets in use and intangible assets are up by almost N3.5 billion. This reduces the gross margin before tax, and strengthens the cash position, but also reduces the net income available for distribution to shareholders.

Idriss Linge