WorldStage Newsonline– MTN Nigeria Communications Plc (MTNN) has released its third quarter Q3-24 unaudited results as pre-tax profit declined by 65.6% y/y to NGN37.66 billion, while profit after tax declined by 94.2% y/y to NGN4.13 billion after a tax expense of NGN33.53 billion.
The company reported a standalone profit after tax of NGN4.13 billion for Q3-24 (-94.2% y/y), with EPS at NGN0.20, highlighting the first positive print since Q3-23 (NGN3.41).
Consequently, 9M-24 loss per share stood at NGN24.51 (vs loss per share of NGN0.68 in 9M-23).
Service revenue grew by 35.4% y/y in Q3-24 (9M-24: +33.6% y/y) due to the broad-based expansion across all business segments – Voice (+16.9% y/y; 38.1% of revenue), Data (+48.3% y/y; 39.9% of revenue), Digital (+109.9% y/y; 2.4% of revenue), Fintech (+32.3% y/y; 3.4% of revenue), and Others (+62.6% y/y; 5.6% of revenue).
Management attributed the growth in voice revenue to higher subscriber minutes and effective customer value management initiatives.
The growth in voice revenue was despite a 0.8% y/y decline in subscriber base to 77.00 million (with a net decrease of 2.40 million in Q3-24), influenced by the Nigerian Communication Commission’s (NCC) directive on NIN-SIM linkage.
Meanwhile, data revenue growth was driven by increased data usage. Specifically, average data usage per customer grew by 31.2% y/y to 11.2 GB, with total data traffic up by 42.1% as of 9M-24.
Additionally, the company added c.1.00 million new home broadband subscribers over the period. However, the total data subscriber base declined by 300,000 to 45.30 million in Q3-24, impacted by the NIN-SIM linkage directive.
In addition, growth in value-added services, including digital and fintech offerings, was driven by higher adoption of MTN Xtratime and other digital products. Furthermore, MTNN’s mobile money (MoMo) segment achieved a 16.6% y/y increase in transaction volume despite reductions in the agent network (-81.5% to 54,000, with a net decrease of 185,000 in Q3-24) as the company streamlined their sales force and prioritised service optimization.
Further down, the growth in operating expenses (+76.4% y/y | 9M-24: +95.9% y/y) outpaced revenue growth, resulting in a 10.19ppts contraction in the EBITDA margin to 37.6% (9M-24: -14.92ppts to 36.3%).
The rise in OPEX still reflects persistent currency pressures, the highly inflationary environment and elevated energy costs.
Markedly, EBITDA margin expanded by 570bps q/q, the first expansion since Q4-23, as the renegotiated tower lease contracts led to cost savings of c. NGN54.00 billion during the period.
Net finance costs increased by 73.1% y/y in Q3-24, driven by a rise in finance costs (+94.0% y/y) following increased interest expenses on leases (+203.8% y/y) and borrowings (+105.7% y/y) reflecting the elevated interest rate environment, naira depreciation and new lease additions from the tower lease renegotiation. Meanwhile, net FX loss declined by 11.9% y/y in Q3-24 but surged by 90.8% y/y in 9M-24, reflecting the significant exchange losses incurred in Q1-24 (NGN656.37 billion).
Overall, pre-tax profit declined by 65.6% y/y to NGN37.66 billion, while profit after tax declined by 94.2% y/y to NGN4.13 billion after a tax expense of NGN33.53 billion.
