MTN Nigeria Communications Plc (MTNN) released its Q1-24 unaudited results Monday, reporting a loss per share of NGN18.63 (vs EPS of NGN5.13 in Q1-23). The dip in earnings was underpinned by the marked expansion in net FX losses (NGN656.37 billion vs NGN4.50 billion in Q1-23), highlighting the impact of FX devaluation.
Total revenue grew by 32.5% y/y in Q1-24, driven by increases across the data (+53.4% y/y), voice (+14.9% y/y), digital (+88.6% y/y), fintech (+0.7% y/y) and other services (+38.6% y/y) channels.
Management revealed that the growth in data revenue, which contributed 46.4% (Q1-23: 40.1%) to revenue, was delivered through improved data offerings, wide coverage and capacity enhancements. In this regard, data usage (GB per user) increased by 28.5% y/y to 10.1GB – 4G coverage: +1bp to 81.6% of the population | 5G coverage: +120bps to 12.4% of the population – and smartphone penetration printed higher at 55.2% (+250bps y/y). Notably, active data users as of March 2024 declined marginally by 0.2%, caused by the barring of subscribers per the NCC’s directive to bar users without linked NINs.
On voice, even as subscribers declined by 2.5% to 77.70 million on the NCC’s directive, voice traffic increased by 5.1% on increased usage, thus supporting the increase in voice revenue. In the earnings press release, management cited customer value management and revamped voice propositions as the primary reasons for the increased voice revenue.
During the quarter, total expenses grew by 71.8% y/y, owing to the (1) persisting FX pressure; (2) higher consumer price index (CPI) and energy costs on lease rentals; and (3) introduction of the VAT on tower leases. Consequently, EBITDA (-1.9% y/y) came in lower, with EBITDA margin printing 39.4% (-13.83 ppts y/y), its lowest point since Q4-19 (22.9%).
Net finance costs remained the most significant pressure point for the company, surging by 19.1x y/y, mostly on still substantial net FX losses (NGN656.37 billion vs NGN4.50 billion in Q1-23), highlighting the impact of the currency depreciation. Finance costs also jumped by 115.4% y/y, while finance income declined by 19.5% y/y.
Overall, MTNN recorded a pre-tax loss of NGN575.69 billion in Q1-24. Following a tax credit of NGN183.00 billion, loss after tax printed NGN392.69 billion (vs PAT of NGN108.43 billion in Q1-23).
