Leading telco in Nigeria, MTN Nigeria Plc, has declared a profit after tax of N101.3 billion for the first quarter financial period ended March 31, 2023.
The growth stood at 4.6 percent year on year while pre-tax profit grew 8.5 percent y/y to N155.78 billion in Q1-23.
Revenue grew by 20.6 percent y/y in Q1-23, primarily driven by the growth in data which stood at 39.4 percent y/y.
Remarkably, the telco’s subscriber base grew to its highest level at 76.70 million since commencement of operations in Nigeria 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.
Management further revealed that the growth in data revenue, which contributed 40.1 percent as against 34.7 percent in first quarter of 2022 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 percent of total revenue in Q1-23.
During the quarter, total expenses grew by 24.2 percent y/y, owing to the (1) continued impact of FX illiquidity; (2) naira devaluation and higher consumer price index (CPI) adjustments on lease rental costs; (3) new site rollouts; and (4) 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 percent increase in finance costs – total debt grew 57.6 percent y/y (+24.1% y/y incl. lease liabilities) to N1.56 trillion as the company issued a N150 billion commercial paper in March 2023.
Finance income increased by 57.3 percent y/y.
Commenting on the financial performance, analysts at Cordros Research noted: “Beyond the solid topline growth, we like that MTNN maintained the growth in its subscriber base in the quarter. For 2023, we maintain our view of sustained growth in the telco’s overall revenue, driven by the firm’s continuous ramp-up of active connections (voice and data) which we believe will be accretive to subscriber base growth.”