MTN Nigeria Communications Plc (MTN Nigeria’s) audited results for the year ended 31 December 2023 is out with a record 5.3% to 79.7 million increase in number of subscribers, Techeconomy can report.
MTN Nigeria 2023 in Numbers:
- Total subscribers increased by 5.3% to 79.7 million
- Active data users increased by 12.7% to 44.6 million
- Active mobile money (MoMo PSB) wallets increased by 163.2% to 5.3 million
- Service revenue increased by 22.4% to N2.5 trillion
- Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 12.3% to N1.2 trillion
- EBITDA margin decreased by 4.5 percentage points (pp) to 48.7%
- Loss after tax was N137.0 billion due to net forex loss
- Profit after tax (PAT) adjusted for the net forex loss decreased by 14.3% to N344.5 billion
- Earnings per share (EPS) declined to negative N6.38 kobo (N16.56 kobo adjusted for the net forex loss, down 14.1%)
- Net loss for the year has resulted in a depletion of our retained earnings and shareholders’ fund to negative N208.0 billion and N40.8 billion, respectively
- Capital expenditure (capex) increased by 13.2% to N571.0 billion (up 24.5% to N449.3 billion, ex-leases)
- Free cash flow increased by 11.6% to N631.6 billion
- Medium-term guidance and outlook: In light of the ongoing volatility in key macroeconomic variables, particularly the naira exchange rate, we have suspended our medium-term guidance for EBITDA margins. We, however, remain committed to accelerating service revenue growth. We continue to see compelling growth opportunities in the market and remain focused on executing on initiatives that will restore earnings and cashflow growth over the medium term.
- Final dividend: In light of the negative retained earnings, the board did not recommend a final dividend for FY 2023.
Despite stellar performance, devaluation wipes out MTN’s profit
Techeconomy had reported earlier that MTN Nigeria recorded losses for the first time since its listing on the Nigerian Stock market, caused majorly by the forex market fluctuation in the country.
Speaking to the factors responsible for this, Karl Toriola, MTN Nigeria CEO, said:
“2023 witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira”.
“These factors created severe headwinds for our customers and our business during the year. The inflation rate increased throughout the year, reaching 28.9% in December 2023 – the highest reading in 18 years – with an average rate of 24.5%. This was further exacerbated by higher fuel prices, arising from the removal of the fuel subsidy in May 2023, with the average prices of diesel and petrol up by 66.4% and 257.1% in 2023 to N1,416.8/litre and N600/litre, respectively.
In June 2023, the Central Bank of Nigeria (CBN) adopted a more liberal foreign exchange management system and reintroduced the ‘willing buyer, willing seller’ model.
According to Toriola, this has resulted in a 96.7% unfavourable movement in the exchange rate against the US dollar from N461.1/US$ in December 2022 to N907.1/US$ (Nigerian Autonomous Foreign Exchange Market (NAFEM) rate) in December 2023.
“This development contributed meaningfully to the upward pressure on the cost of doing business in Nigeria, and for MTN Nigeria in particular, significantly increased the costs in relation to our tower leases.
“In December 2023, we released an announcement relating to an industry-wide directive issued by the Nigerian Communications Commission (NCC) to operators in the country.
“This directed operators to implement full network barring on all subscriber lines for which subscribers have not submitted their National Identity Numbers (NINs) and those whose NINs are unverified.
“To mitigate the effects of these headwinds on our operations, we continued to invest in our network infrastructure – with a disciplined focus on value-based capital allocation and efficiencies – to enhance capacity and expand coverage. This enabled us to meet the rising demand for data and, coupled with compelling and competitive propositions for our customers, accelerate the growth of our commercial operations”.
