MTN in Nigeria posts first quarter profits, after riding strong headwinds
MTN Nigeria today reported profit in 2023 first quarter results, after riding a series of strong headwinds in the period.
The telco today released results for the quarter ended March, showing a surge in profits and massive growth of data usage.
Nigeria is the top profit-making market for MTN Group, generating the lion's share of the telco's revenue.
In the quarter, mobile subscribers increased by 9.4% to 76.7 million, adding 1.1 million new subscribers.
MTN added 1.7 million active data users, increasing total number by 14.7% to 41.2 million. In the period, active mobile money (MoMo PSB) wallets increased by 1.2 million to 3.2 million.
In financial metrics, service revenue increased by 20.5% to N565.9 billion, earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 17.7% to N302.7 billion.
Profit before tax grew by 8.5% to N155.8 billion, earnings per share rose by 3.8% to N4.94 kobo.
Also, capital expenditure (Capex) declined by 25.8% to N120.5 billion (down 47.8% to N42.4 billion, excluding the right-of-use assets)
Commenting on the performance, MTN Nigeria CEO, Karl Toriola, said while please with results, the company had to navigate a challenging operating environment.
He explained: “We continued to experience headwinds in our operating environment in the first quarter of 2023. The impacts of the ongoing global macroeconomic and geopolitical developments on energy, food and general inflation were exacerbated locally by petrol and cash shortages experienced during the period.
“This placed additional pressure on economic activity, consumers and businesses. The private sector experienced the deepest contraction in March 2023 since the recovery from the COVID-19 pandemic, driving down the PMI index to 42.3 points from 44.7 points in February 2023.”
In addition, he said, the inflation rate in Nigeria rose to a 17-year high of 22% in March 2023, representing the third consecutive month-on-month increase in 2023, with an average of 21.9% in the quarter.
“Against this backdrop, we continued to manage the business and invest in the resilience of our networks, expanding coverage and capacity with a focus on cost efficiencies and disciplined capital allocation. This underscored our strong commercial momentum and financial performance in line with our medium-term guidance,” he said.
Giving MTN’s operational overview, Toriola said the company ticked green in its key metrics, with data and digital services recording double-digit growth.
Data revenue rose by 40.0%, which he said was on the back of sustained growth of MTN’s active data users and increased data usage.
Similalrly, digital revenue grew by 41.2% as the adoption of MTN’s digital products continues to grow. Its active base on digital services went up 58.4% to 11.7 million.
In the quarter, fintech revenue increased by 8.6%, and service revenue grew by 20.5%.
Looking ahead, Toriola said: “The first quarter of the year remained challenging due to the rising food and energy inflation, supply chain challenges, and local currency and foreign exchange availability.
“However, as the rest of the year unfolds, we will continue to invest to support the resilience and growth of our business, taking advantage of opportunities embedded within our connectivity and platform businesses such as fintech.
“Our focus is to continue enhancing the capacity of our network, accelerating 4G and 5G coverage to accommodate the rising data traffic and expanding rural coverage.
“We will continue to drive our home broadband strategy leveraging our 5G fixed wireless access device penetration and increased fibre deployment in key clusters to capture a significant share of market growth.”