MTN Nigeria’s half-year profit jumps 28.1% to N181.6bn in Q2

...declares Interim dividend of N5.60 kobo

MTN Nigeria Communication Plc has reported a half-year profit after tax of N181.6 billion for the 2022 financial year, up 28.1 percent from N141. billion in the corresponding period last year, the firm latest financial report has said.

Data sourced from the firm’s financial report showed the telecommunication’s revenue increased to N950.0 billion from N791 .2 billion in the corresponding period last year.

Its service revenue was up 19.9percent to N 947.9 billion; active fintech subscribers rose by 87.3 percent to 11.5 million; Capital expenditure (Capex) rose by 67.1percent to N311.6 billion while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 22.1percent to N509.3 billion.

The company’s earnings per share increased by 28 percent to N8.92 kobo.

“During the first half of 2022, we made good progress in strengthening the resilience of the business in the face of our increasingly challenging operating environment with rising energy, food and general inflation putting pressure on consumer spending,” MTN Nigeria CEO, Karl Toriola said.

MTN Nigeria’s financial report also showed the firm used CAPEX of N311.6 billion to accelerate the rollout of its 4G network, which now covers 75.3percent (compared to 65.1percent in H1 2021) of the population and accounts for 77.9percent of data traffic (compared to 67.2percent in H1 2021).

“We maintained strong commercial momentum with a net addition of 5.7 million mobile subscribers in H1. This reflects a pleasing acceleration in the run-rate of monthly net additions during Q2, following the initial impact of the restriction of outgoing calls placed on subscribers who had not submitted their National Identity Number (NIN) as at 4 April 2022. Our aggressive drive for gross connections supported this recovery as we ramped up SIM registration and NIN enrolment capacity,” Toriola said.

MTN’s data revenue rose by 51.6percent, maintaining the accelerated growth trajectory through 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,” Toriola said.

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Toriola admitted that the business continues to face some strong headwinds such as rising general inflation, paucity of foreign exchange, supply chain disruptions, and higher diesel and petrol prices, which places more financial pressure on our customers as well as our business.

On its funding and liquidity challenges, Toriola said the firm remains supported by cash flows and approved facilities. “Our debt metrics remain well within all our financial covenants, with a net debt to EBITDA ratio of 0.6 times. As a result, we can comfortably meet our operational, financial and capex investment obligations. In addition, our foreign currency exposure is within manageable limits.”

Concerning its outlook plan, Toriola said MTN Nigeria plans to commence the initial launch of 5G services in the six geopolitical zones in Q3 2022.

“We will also continue to pursue our home broadband strategy to capture a significant share of market growth while leveraging the fixed wireless access, fibre and 5G technologies for enhanced speeds,” Toriola said.

He noted that the interventions the firm put in place to moderate the impact of the NIN-SIM linkage regulation on revenue and the anticipated increase in churn in Q3 2022 continue to yield results, although the National Identity Management Commission (NIMC’s) validation capacity remains a challenge.

“This will impact the development of our subscriber base in Q3 2022. However, we anticipate a more normalised trajectory in Q4 2022,” Toriola said.

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