MTN Nigeria, Ghana report Q1 growth despite headwinds

28th April 2023

By: Natasha Odendaal

Creamer Media Senior Deputy Editor


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MTN Nigeria’s first quarter earnings before interest, taxes, depreciation and amortisation (Ebitda) expanded 17.7% to N302.7-billion during the first quarter of 2023.

While the group’s Ebitda margin declined by 1.3 percentage points to 53.3%, it remained within MTN Nigeria’s medium-term guidance range of 53% to 55%.

During the first quarter of 2023, MTN Nigeria posted an 8.5% increase in profit before tax to N155.8-billion, while profit after tax, excluding non-controlling interest, increased by 3.8% to N101.49-billion, amid a higher effective tax rate mainly owing to an increase in the tertiary education tax and a reduction in deferred tax assets recognised in 2022.

Earnings a share increased by 3.8% to N4.94 kobo.

“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,” says MTN Nigeria CEO Karl Toriola.

“The continued impact of foreign exchange availability, naira depreciation and higher consumer price index adjustments on lease rental costs, the new site rollouts and rising energy costs exerted upward pressure on operating expenses (opex), resulting in a 29.2% increase to N173.49-billion,” he adds.

However, the impact of the higher opex was moderated by the cost savings realised from MTN Nigeria’s expense efficiency programmes and its disciplined approach to capital allocation.

During the first quarter of the year, MTN Nigeria reported a 20.5% increase in service revenue to N565.9-billion owing to strong voice, data, fintech and digital services growth, supported by an increased subscriber base and use of services.

“Our mobile subscriber base rose 9.4% to 76.7-million, the highest level since our operations commenced in 2001. However, cash shortages experienced during the period impacted customers’ ability to recharge through physical vouchers. It also resulted in migration to digital recharge platforms, mitigating the impact,” he says.

Active data users increased by 14.7% to 41.2-million, while data revenue increased 40%.

The group’s total data traffic increased 50.3% during the quarter under review, with fourth-generation (4G) traffic accounting for 81.6%.

MTN Nigeria’s 4G network coverage reached 79.3% of the population in the first quarter, an increase from 79.1% in December 2022, while data use grew by 31.3% to 7.8 GB per user.

An additional 170 fifth-generation (5G) sites were deployed during the first quarter, increasing population coverage to 4% and expanding the network experience to more smartphone users.

In addition, MTN Nigeria added over 804 000 new smartphones to its network, bringing smartphone penetration to 52.7%.

“We continued to advance our home broadband penetration by adding 169 000 users in the first quarter, bringing our user base to 1.4-million. This was supported by deploying our 5G fixed wireless access devices, mobile broadband solutions and fibre-to-the-home connectivity,” says Toriola.

During the quarter under review, Fintech revenue increased 8.6% and digital revenue grew by 41.2%.

Active mobile money (MoMo) wallets increased by 1.2-million in the first quarter of 2023 to 3.2-million.

MTN Nigeria’s capital expenditure (capex) declined 25.8% to N120.5-billion.

Meanwhile, MTN Ghana posted a 16.4% increase in Ebitda to HS1.6-billion and a 3.2 percentage points decline in its Ebitda margin to 56.3% during the first quarter of 2023.

Profit after tax increased 5.4% to GHS745-million in the period.

“MTN Ghana delivered a strong performance in the first quarter of 2023, with a 23.2% increase in overall service revenue to GHS2.9-billion, supported by growth in voice, data and MoMo. We also continued to grow our subscriber base with improved service offerings and network connectivity,” says MTN Ghana CEO Selorm Adadevoh.

The number of mobile subscribers increased by 1.4% to 27.4-million, while active data subscribers increased by 8.4% to 13.9-million and active MoMo users increased by 15.9% to 13.4-million.

“Growth in our customer base coupled with customer value management supported a 12.9% growth in voice revenue to GHS887-million. Voice revenue contribution to total service revenue declined from 33.4% to 30.7% in line with our revenue diversification strategy.”

During the quarter under review, demand for data services remained strong with a 51.5% increase in traffic, supporting a 30.3% increase in data revenue to GHS1.1-billion. The contribution of data revenue to total service revenue increased from 37.1% to 39.3%.

MoMo revenue continued its recovery from the implementation of the e-levy last year with a 24.8% increase to GHS643-million, with the contribution of MoMo revenue to total service revenue increasing marginally from 21.9% to 22.2%.

“In line with ensuring transparency and enhancing customer experience, we continued with our portfolio-rationalisation programme. This resulted in a decrease in active digital subscribers by 1% and a decline in digital revenue by 24.7% to GHS32-million,” says Adadevoh, noting that the contribution of digital to total service revenue decreased from 1.8% to 1.1%.

During the quarter under review, MTN Ghana invested GHS1.1-billion in capex to expand network capacity and coverage, enhance information technology systems and modernise the existing network infrastructure.

“We rolled out 17 second-generation, 20 third-generation and 379 4G sites during the period, which helped boost our 4G population coverage to 99.3%,” he concluded.

Edited by Creamer Media Reporter



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