MTN Nigeria Sees Revenue Growth but Faces Profit Challenges Amid Forex Impact
MTN Nigeria Communications Plc has reported its financial results for the nine months ending on September 30, 2024, showcasing a mix of growth in service revenue and active data users alongside challenges due to forex losses and regulatory impacts.
The telecom giant saw a slight decline in total subscribers, down 0.9% to 77 million, largely due to ongoing adjustments related to the National Identity Number (NIN)-SIM registration regulations. However, active data users rose by 5.1%, reaching 45.3 million, signaling an expanding digital customer base. Mobile Money (MoMo PSB) wallets faced a setback, declining by 21.8% to 2.8 million users, reflecting a more challenging market landscape in digital financial services.
Financially, MTN Nigeria achieved a notable 33.6% increase in service revenue, reaching N2.4 trillion. Despite this revenue growth, the company experienced a 5.3% drop in EBITDA, totaling N860.2 billion, with a reduced EBITDA margin of 36.3%, down by 14.9 percentage points. The impact of foreign exchange losses was evident in the reported loss after tax of N514.9 billion. Adjusted for the forex loss, profit after tax was N118.5 billion, marking a 59.2% decline. Earnings per share, similarly adjusted, stood at N5.65 kobo, also down by 59.2%.
On the balance sheet, MTN Nigeria closed with negative retained earnings of N723.0 billion, while shareholders’ funds amounted to N573.6 billion. The company maintained a disciplined approach to capital expenditure, which decreased by 27.8% to N217.6 billion, excluding leases. Despite economic and regulatory challenges, MTN Nigeria generated positive free cash flow of N536.8 billion, an increase of 21.9%, underscoring its ability to manage cash flow effectively amid a turbulent period.
In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility –
despite challenging conditions.The inflation rate remained elevated amidst rising energy prices and naira depreciation. Inflation averaged 32.8% in the nine months (Q3 2024: 32.8%) compared
Karl Toriola, CEO, MTN Nigeria
to an average of 24.5% in 2023 (Q3 2023: 25.5%). To curb inflation, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by 8.5pp to 27.25% during the period, resulting in higher funding costs, although this helped reduce volatility and improve liquidity in the forex market.
