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How 50% growth in data services boost MTN’s revenue to 5-year high

How 50% growth in data services boost MTN’s revenue to 5-year high

MTN Nigeria Communications Plc’s revenue surged by 20.66 percent to N1.46 trillion in the nine-month (9M) period ended September 2022 from N1.21 trillion in the corresponding period of 2021, primarily driven by growth in its data revenue-generating segment.

Data obtained from the nine-month financial results available on the Nigerian Exchange Group shows that the data generating-revenue segment grew by 49.98 percent to N549 billion in the nine-month period of 2022 from N366 billion in the nine-month period of 2021, while its voice revenue-generating segment grew marginally by 3.17 percent to N549 billion from N366 billion in the periods under review.

Its SMS revenue-generating segment grew by 38.36 percent in the nine-month period of 2022 to N41.12 billion from N33.33 billion in the nine-month period of 2021, while its digital revenue-generating segment grew by 38.24 percent to N17.89 billion from N12.95 billion in the period under review.

MTN’s direct network operating costs grew by 14.38 percent to N333.9 billion in the nine-month period of 2022 from N291.8 billion in the nine-month period of 2022. The increase reported was primarily driven by the 22.56 percent rise in regulatory fees during the period amounting to N37 billion from N30 billion in the nine-month period of 2021.

Operating expenses (OPEX) grew by 17.94 percent to N584.53 billion in the nine-month period of 2022 from N496 billion in the nine-month period of 2021, largely due to the 328.9 percent growth in the cost of starter packs, handsets, and accessories reported in the period.

On account of the depreciating naira value, a 289 percent boost in net foreign exchange losses reported by the telecommunications company drove finance costs reported by 39.05 percent in the nine-month period of 2022 to N145.7 billion from N104.7 billion in the corresponding period of 2022.

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Net foreign exchange losses grew to N28.36 billion in 9M’2022 from N7.29 billion in 9M’2021, while on account of rising interest rates, interest expense on borrowings grew by 52.33 percent to N46.4 billion in 9M’2022 from N30.5 billion in 9M’2021.

MTN, however, generated extra income from interest income on bank deposits (N3 billion), interest income on amortised cost investments (N5 billion), and currency swap gain (N494 million) during the period.

Consequently, profit after tax grew by 22.27 percent to N269 billion in the nine-month period of 2022 from N220 billion in the nine-month period of 2021.

MTN reported total assets amounting to N2.42 trillion in the nine-month period of 2022, representing a 15.24 percent increase from N2.1 billion in the nine-month period of 2021.

Its total shareholder’s equity jumped 30.65 percent in the nine-month period of 2022 to N243 billion from N186 billion in the same period of 2021.

The firms’ cash and cash equivalents, however, declined by 38.65 percent to N127 billion in 9M’2022 from N207 billion in 9M’2022.

Movements in its cash and cash equivalents as shown in its cash flow statement show that its net cash flow from operations was positive amounting to N209 billion in the nine-month period of 2022, thereby indicating that the telecommunications company generates enough cash from its core operations to cover its short term liability.

However, its net cash from operations declined by 29.15 percent from N295 billion reported in the nine-months period of 2021.

Net cash flow from investing activities during the period was N-417 billion in 9M’2022, largely due to the acquisition of new property, plants, and equipment amounting to N261.78 billion during the period.

Net cash flow from financing activities stood at N59.6 billion in 9M’2022 primarily due to proceeds from borrowings which amounted to N307 billion in 9M’2022.

Overall, MTN Nigeria Communications Plc reported earnings per share of N13.30 per share for the nine-month period of 2022.