THUR, APRIL. 27 2023-theGBJournal|MTN Nigeria Communications Plc (MTNN) released its Q1-23 unaudited results today, reporting revenue growth of 20.6% y/y in Q1-23, primarily driven by the growth in data (+39.4% y/y) revenue.
Management revealed that the growth in data revenue, which contributed 40.1% (Q1-22: 34.7%) to revenue was delivered through a combination of increased subscribers (Q1 net additions: +1.70 million), increased usage and traffic across the 4G & 5G networks (+50.3% y/y) and a roll out of an additional 170 5G sites.
The growth in MTNN’s subscriber base (Q1 net additions: +1.10 million) provided support for voice revenue (+7.4% y/y) which accounted for 41.3% of total revenue in Q1-23. Pertinently, MTNN’s subscriber base grew to its highest level (76.70 million subscribers) since commencement of operations in 2001.
According to management, the key drivers for this were increased usage supported by a revamped voice proposition, customer value management initiatives and improved rural coverage.
During the quarter, total expenses grew by 24.2% y/y, owing to the (1) continued impact of FX illiquidity; naira devaluation and higher consumer price index (CPI) adjustments on lease rental costs; new site rollouts; and rising energy costs.
EBITDA (+17.7% y/y) grew slower than revenue, with EBITDA margin printing 53.3%, 133bps lower than the previous quarter, owing to the increased costs.
Net finance costs (+42.2% y/y) rose in Q1-23, following a 44.0% increase in finance costs – total debt grew 57.6% y/y (+24.1% y/y incl. lease liabilities) to NGN1.56 trillion as the company issued a NGN150.00 billion commercial paper in March 2023. Finance income increased by 57.3% y/y.
MTNN’s earnings also showed a 3.8% y/y increase in EPS to N4.94. The growth in earnings was driven mainly by the robust expansion in the top line (+20.6% y/y) amid a 133bps decline in EBITDA margin.
Overall, pre-tax profit grew 8.5% y/y to N155.78 billion in Q1-23. Following an effective tax rate of 35.0% (Q1-22: 32.6%) profit after tax printed N101.30 billion (+4.6% y/y).
“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,” says MTN Nigeria CEO, Karl Toriola while commenting on the performance.
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