MTN Nigeria Communications Plc has posted an N269 billion profit after tax for the 9 months ended September 2022, showing a 22.1% growth year on year. The company’s profit was largely driven by a jump in data revenue.
The company’s revenue for the period stood at N1.45 trillion, a 20.7% increase compared to N1.20 trillion recorded in the same period last year. A breakdown of the unaudited financial results for the 9 months which was released on Friday, showed that MTN’s voice revenue increased by 4.4% to N753.7 billion from N722 billion recorded in the same period last year.
Showing a significant increase in data consumption by the company’s subscribers, MTN’s data revenue jumped by 49.1% to N549.6 billion from N368.6 billion recorded last year. With this, data revenue is inching to become parallel with voice revenue for the telecom operator.
While voice service had been the major source of revenue for telecom operators in Nigeria over the past years, data has been projected to occupy that position in the next 1 to 2 years as Nigerians are now spending and consuming more on data.
What MTN’s CEO is saying
Commenting on the 9 months’ results, MTN Nigeria CEO, Karl Toriola said:
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“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.”
“We added 5.7 million mobile subscribers in the nine months bringing our base to 74.1 million, notwithstanding an increase in churn in Q3 2022. This was expected following the NCC’s directive to restrict outgoing calls for subscribers whose SIMs are not associated with NINs.
“As a result, there was a marginal quarter-on-quarter decline in mobile subscribers by approximately 57k. Encouragingly, the increase in churn was largely offset by the acceleration in gross connections. We anticipate a moderation in churn in Q4, which should support base growth broadly in line with our expectations for FY 2022.”
On the macro-economic environment, Toriola said:
“Our operating environment remained challenging in the first nine months of 2022. The ongoing global macroeconomic and geopolitical volatility continued to drive up energy, food, and general inflation, with the annual inflation rate in Nigeria rising to a 17-year high of 20.8% in September 2022.
“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. Against this backdrop, we continued to support our communities and sustain investment in the coverage and capacity of our 4G network and the rollout of 5G sites, with a focus on expense efficiencies and disciplined capital allocation. This has underpinned a resilient commercial and financial performance in the period, also enabled by the unwavering support of our customers and stakeholders, as well as the hard work and commitment of our people.”
Other key highlights of the result
MTN’s active fintech subscribers in the period under review rose by 68.7% to 11.2 million
Service revenue increased by 20.6% to N1,452.7 billion as its 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%
Profit before tax (PBT) grew by 24.7% to N400.7 billion, while income tax paid by the company increased by 26.9% to N139.5 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)