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Toriola applauds MTN Nigeria’s fiscal discipline on back of strong Q3

By , Portals editor
Nigeria , 31 Oct 2022

MTN Nigeria’s CEO Karl Toriola has attributed the operator’s strong Q3 performance to, among others, to disciplined execution of its expense efficiency programme, moderation of commercial activities and enhancement of control systems.

The operator released its quarterly results for the nine months ended 30 September 2022.

It recorded an increase of 9.7% in mobile subscribers to 74.1 million, a 14.6% increase in active data users to 38 million and a 68.7% increase in active Fintech subscribers to 11.2 million.

Toriola said it was a challenging first nine months of the year, with global macroeconomic and geopolitical volatility driving up energy, food and general inflation.

He added that the annual inflation rate in Nigeria rose to 17-year high of 20.8% in September this year.

“Supply chain uncertainties were exacerbated by the availability of foreign currency needed for capital expenditure. These headwinds continue to put severe financial pressure on consumers and businesses,” said Toriola.

The company also reported an increase in service revenue increased by 20.6% to N1,452.7-billion; Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 23.0% to N780.6-billion; EBITDA margin increased by 1.0 percentage points (pp) to 53.6%; and Profit before tax (PBT) grew by 24.7% to N400.7-billion.

Capital expenditure (Capex) rose by 45.2% to N379.0-billion (up 51.3% to N251.8-billion, excluding the right-of-use assets)

However Toriola did acknowledge the impact of the Nigerian Communications Commission’s (NCC) directive to restrict outgoing calls for subscribers whose SIM cards are not linked to NINs.

The company witnessed a quarter-on-quarter decline of 57,000 mobile subscribers.

According to Toriola, the increase in churn was largely offset by the acceleration in gross connections.

Fintech remains a key focus for the company. It’s MoMo Payment Service Bank (PSB) was launched in May and its active Fintech user base, as at the end of September 2022, was 11.2 million – “of which 1.8 million are active MoMo wallets (down 29.4% in Q3)” the company stated.

The operator has also underlined its continued investment in 4G coverage and roll out of 5G sites.

Said Toriola, “The investments we make to enhance the quality and coverage of our network continue to yield positive results, driving higher data usage and an expansion of our user base. We added 3.7 million active data subscribers in the nine months, with 4G population coverage at 77.1% (up 7.9pp YoY). 4G traffic now constitutes 80.4% of the total, reflecting a 9.2pp YoY increase in its contribution.”

Last week the company secured €100-million financing from the European Investment Bank (EIB) to reinforce its network expansion programme.

According to a statement released by EIB, the investment will aid the acceleration of 4G coverage in Nigeria and expand broadband access in line with MTN’s Ambition 2025 strategy.

“This transaction represents EIB’s largest financing for mobile telecoms network expansion in Africa and is consistent with MTN Nigeria’s digital transformation and inclusion efforts. It will improve network capacity across the country to accommodate rising data traffic, and enhance coverage in Lagos and Ogun States,” reads an excerpt from the statement.

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