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Sunday, March 26, 2023

MTN, Nigeria’s Most Profitable Company, Practically Prints Money

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Most NGX-ASI 30 companies are lucky if they keep 8 percent of every Naira they earn as revenue, after paying expenses in a tough and unpredictable macroeconomic environment. Imagine a company that is 6 times that profitable, which puts it in a position to withstand macroeconomic headwinds.

Of all companies in the NGX-30 Index that tracks the most capitalised and liquid firms, MTN Nigeria has the highest net profit Margins which stands at 51.16 percent as at June 2022, according to Data Gathered by MoneyCentral.

That means the telecommunication giant keeps 51 kobo from every Naira in revenue, even after paying all their expenses.

Of course, a business with a profit margin of 51 percent will earn you a million Naira twice as quickly as a business with a margin of 25 percent.

It is important to have a healthy profit margin on your core goods and services because this is the money that goes towards your personal income and building up a reserve of cash for expansion and emergencies.

One of the most important reasons for MTN Nigeria’s strong profits is that it sells products that consumers are willing to pay any price for and its value products have become an addiction to people that crave for data usage.

While most firms were hard hit by the coronavirus pandemic, the telco giant was making money as evidenced by increased voice and data revenue  because the stay at home order by the government forced more people to use their mobile application to surf the internet so as to fend off boredom.

Also, during the pandemic era, there were teleconferencing and virtual meetings that added impetus to data usage.

Investors who have not bought MTN Nigeria stock yet are missing in action as the company will continue to mint money and be a profit marker as it is unflinchingly expanding in infrastructure with a view to magnifying earnings.

The telco giant has kicked off an open 5G pilot as it intends to launch 5G services in Lagos, Abuja, Port Harcourt, Ibadan, Kano, Owerri, and Maiduguri.

The spectrum issued to MTN Nigeria as one of the two successful winners of the 5G license bid holds a promising future for technology in Nigeria.

The implementation of 5G will accelerate the actualization of the national targets in the Nigerian National Broadband Plan, the National Digital Economy Policy and Strategy, as well as other sectoral policies designed to enhance Nigeria’s digital transformation.

MTN Nigeria has generated more profit from operations than African peers even amid a difficult environment as the company’s cost control measures continue to bolster margins.

MTNN’s Ebitda margin is 53.60 percent at June 2022, and that compares with South Africa’s Vodafoam Group, (38.80 percent); Kenya’s Safaricom’s (50 percent); Airtel Africa, (48.30 percent); South Africa’s MTN Group, (41.60 percent), and Senegal’s Sonatel, (44.20 percent).

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