MTN Nigeria CEO Karl Toriola.

MTN Nigeria's earnings fell in six months as higher energy prices and growing costs harmed margins.

On Friday, the telecoms company released its half-year results ending in June, stating that pre-tax profit fell by 25.4% to N200.4 billion, while earnings per share fell by 29.3%.

“Our margins were impacted by higher energy prices and rising costs, but the impact was moderated by provisions in our tower contracts and the timing of the forex harmonisation,” said MTN Nigeria CEO, Karl Toriola.

“Notwithstanding, we will continue to execute our commercial strategy with a focus on unlocking efficiencies and driving operating leverage to support growth in earnings, cash flow, and returns over the medium term.”

Nigeria accounts for the lion's share of MTN Group's income among the 19 markets in which it operates.

MTN Group recently announced a $3.5 billion investment in Nigeria over the next five years, and Group CEO Ralph Mupita believes Nigeria has the potential to become the world's fifth-largest economy, if it seizes the digital opportunity.

MTN Nigeria's mobile customers climbed by 4.0% to 77.1 million during the current reporting period, while active data users increased by 11.5% to 41.0 million.

In addition, the number of active mobile money wallets climbed by 1.1 million in the first half to 3.1 million.

In terms of financial indicators, service revenue climbed by 21.6% to N1.2 trillion, while earnings before interest, tax, depreciation, and amortisation increased by 21.6% to N1.2 trillion.

Toriola commented that the company had faced a hard operating climate. He said: “The operating conditions in the first half of 2023 remained challenging with energy, food, and general inflation at elevated levels.

“This was due to the ongoing adverse global macroeconomic and geopolitical environment, the cash shortages experienced in first quarter, forex volatility and availability and supply chain uncertainties witnessed during the period.

“As a result, the inflation rate in Nigeria rose to an 18-year high of 22.8% in June 2023, representing the sixth consecutive month-on-month increase in 2023, with an average of 22.2% in first half (H1).

Turning to fintech, which is quickly becoming MTN's golden goose, Toriola stated that with the active wallets increase of 1.1 million in H1, the total number of registered MoMo PSB wallets currently exceeds 22 million.

"Our fintech business remains a key priority for us as we continue to put structures in place to support the execution of our growth strategy and scale the fintech ecosystem in line with our Ambition 2025 strategy," he explained.

"In this regard, we are ramping up commercial activities to stimulate increased engagement and activity," Toriola noted. “Across our fintech sectors, we are growing our consumer education and awareness programmes and providing more advanced services.”