MTN Nigeria’s first-quarter financial performance in 2024 saw a mixed bag of results as topline growth persisted amidst challenges stemming from inflationary pressures and forex losses.
Despite grappling with the adverse effects of rising inflation and the continued depreciation of the Naira, MTN Nigeria managed to post a robust revenue growth of 32.5% year-over-year, amounting to N753.0 billion.
A notable highlight was the moderate increase in mobile subscribers by 1.3% year-over-year, reaching 77.7 million, while voice revenues saw a healthy uptick of 14.9% year-over-year, totaling N318.9 billion.
This growth was attributed to enhanced customer usage driven by successful Customer Value Management (CVM) initiatives and revamped voice offerings.
Data revenues emerged as a standout performer, witnessing a remarkable surge of 53.4% year-over-year to N349.5 billion, surpassing voice revenues.
This growth was propelled by improved data bundle offerings, expanded network coverage, increased capacity, and a notable 8.0% year-over-year rise in data subscribers, totaling 44.5 million.
Digital revenue also experienced a significant upswing, soaring by 88.6% year-over-year to N13.6 billion, driven by the growing adoption of digital products and services, including user journey optimization and revamped digital offerings.
However, the fintech segment faced challenges, with revenues remaining nearly flat at N22.8 billion due to the National Identification Number (NIN) requirement for Know Your Customer (KYC) validation, impacting approximately a million active wallets.
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Despite this, fintech subscribers saw a substantial increase of 48.8% year-over-year to 4.8 million.
Operating expenses witnessed an increase primarily due to the combined effects of naira depreciation, higher consumer price index (CPI) energy costs on lease rentals, and the introduction of Value-Added Tax (VAT) on tower leases.
Consequently, the company’s operating profit declined by 15.7% year-over-year to N174.1 billion, with an operating margin contraction to 23.1% in the first quarter of 2024.
Finance income decreased by 19.5% year-over-year to N5.3 billion, while finance costs more than doubled (115.4% year-over-year) to N98.7 billion, primarily reflecting higher finance costs on leases, borrowings, and other derivative liabilities.
Additionally, the net foreign exchange loss surged to N656.4 billion, compared to N4.5 billion in the same period last year, mainly due to significant naira depreciation.
Consequently, MTN Nigeria reported a net loss of N392.7 billion in the first quarter of 2024, compared to a profit of N107.6 billion in the corresponding period last year.
Adjusting for the net forex loss, the Profit After Tax (PAT) would have been N47.1 billion, representing a decrease of 57.8%.
In response to regulatory directives, the company effectively barred subscribers not linked to their National Identification Number (NIN), resulting in a reduction of 2 million total subscribers in the first quarter.
Despite this, investor reaction to MTN Nigeria’s first-quarter results was positive, with the stock witnessing a 3.96% increase to N210.00.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
