Despite MTN Nigeria’s operating environment remaining challenging in the third quarter as the ongoing global macro-economic and geopolitical volatility drove up energy, food and general inflation, the telecoms group still reported a rise in profit.
In its financial results for the third quarter ended September 30, 2022, the group said the inflation rate in Nigeria had risen to a 17-year high of 20.8% in September 2022.
MTN Nigeria chief executive Karl Toriola said: “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."
Toriola said MTN Nigeria added 5.7 million mobile subscribers in the nine months, a 9.7% hike, bringing its base to 74.1m, notwithstanding, an increase in churn in the third quarter of 2022.
He said this was expected following the Nigerian's Communications Commission’s (NCC) directive to restrict outgoing calls for subscribers whose SIMs were not associated with National Identification Numbers (NIC). As a result, there was a marginal quarter-on-quarter decline in mobile subscribers by about 57k (570000).
“Encouragingly, the increase in churn was largely offset by the acceleration in gross connections. We anticipate a moderation in churn in the fourth quarter, which should support base growth broadly in line with our expectations for FY 2022 (financial 2022),” he said.
MTN Nigeria said there were 3.7m active data subscribers in the nine months, with a 4G population coverage at 77.1%.
The group said its active fintech users at the end of September 2022 were 11.2m, of which 1.8m were active MoMo wallets, down 29.4% in the third quarter.
Registered MoMo wallets increased by more than two times to 9.9 million in the third quarter, demonstrating the underlying momentum in the ecosystem, the group said.
Service revenue increased by 20.6% to N1 452.7 billion (R60.6bn). MTN Nigeria said service revenue grew in line with its medium-term guidance of at least 20%.
Earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 23% to N780.6bn.
Profit before tax grew by 24.7% to N400.7bn. Income tax paid increased by 26.9% to N139.5bn. Profit after tax grew by 22.1% to N269bn. Earnings per share rose by 22.1% to N13.20. Capital expenditure increased by 45.2% to N379bn, up 51.3% to N251.8bn, excluding the right-of-use assets.
Voice revenue grew by 4.4%, maintaining a steady recovery as more customers were reactivated and gross connections continued to ramp up.
“This was supported by our customer value management (CVM) initiatives, through which we managed churn and drove increased usage from the existing base,” the group said.
Data revenue rose by 49.1% on increased subscribers and data usage.
“This was sustained by an aggressive 4G network expansion and enhanced quality and capacity of our network to support rising data traffic, as we continue to drive the conversion of existing subscribers on the 3G network to 4G and drive smartphone penetration,” it said.
Fintech revenue increased by 21.9%, and growth was broad-based across Xtratime, its airtime lending product, up 20.6%, and core fintech services, wallet and agency business increased by 232%.
The mobile operator said following the commercial launch in September 2022, it became the first mobile network operator to roll out a 5G network in Nigeria, providing coverage in key cities in the six geopolitical regions.
“5G provides the foundation on which future network performance will be built and puts MTN Nigeria at the forefront of delivering technological advancements in the country,” the group said.
BUSINESS REPORT