MTN Nigeria Adds 1.5 Million New Subscribers in H1 2023, Surpasses 77 Million Milestone

MTN Nigeria Communications Plc (MTN Nigeria) reported a 4.0% increase in mobile subscribers to 77.1 million, with 1.5 million new subscribers added in H1 2023.

Active data users rose by 11.5% to 41.0 million, indicating a surge in data consumption in the period under review.

MTN Nigeria’s Mobile Money (MoMo PSB) service also experienced growth, with 1.1 million new wallets created during the first half of the year to bring the total to 3.1 million.

Despite these positive indicators, the company faced a decline in profit before tax (PBT) of 25.4% to N200.4 billion. However, it is essential to consider that this decline was partially influenced by an unrealized foreign exchange (forex) loss, and the adjusted PBT showed a 17.6% increase to N331.8 billion.

Service revenue rose by 21.6% to N1.2 trillion while earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 20.6% to N614.5 billion.

On the flip side, the EBITDA margin slightly declined by 0.6% to 53.0%. Capital expenditure (capex) also experienced a decrease of 14.4% to N266.8 billion.

Despite the challenges, MTN Nigeria maintained its interim dividend of N5.60 kobo per share from the prior year.

Commenting on the company’s performance, MTN Nigeria CEO, Karl Toriola said “The operating conditions in the first half of 2023 remained challenging with energy, food, and general inflation at elevated levels. This was due to the ongoing adverse global macroeconomic and geopolitical environment, the cash shortages experienced in Q1, forex volatility and availability and supply chain uncertainties witnessed during the period.

“As a result, the inflation rate in Nigeria rose to an 18-year high of 22.8% in June 2023, representing the sixth consecutive month-on-month increase in 2023, with an average of 22.2% in H1. To rein in inflation, the Central Bank of Nigeria (CBN) continued its monetary policy tightening, increasing the monetary policy rate by 2pp to 18.5% in H1, and a further 0.25pp increase in July.

“Following the inauguration of President Bola Ahmed Tinubu in May 2023, swift reforms were implemented to remove the fuel subsidy and liberalise foreign exchange management, to bolster investor confidence and drive growth and investment in Nigeria. These policy reforms are expected to be positive for the economy in the medium to long term.”

“However, in the short term, they have created additional financial burdens on consumers and businesses, and these will be fully reflected in the pressures on our margins in H2. As a result, the Federal Government has declared a state of emergency to tackle rising food prices and shortages and cushion the effect on consumers. This is supported by further reforms aimed at creating an enabling environment for businesses to thrive.

“We are pleased with the robust commercial and financial performance in H1, delivered against this challenging backdrop. As we navigate these macro headwinds, we continue to invest in our business to further improve the quality of our offering, strengthen our commercial operations and focus on expense efficiencies and disciplined capital allocation to support earnings and cash flow generation.

“To this end, in May, we leased 900MHz and 1800MHz spectrum covering 19 states from NTEL for a 2-year period to enhance coverage and capacity, a significant milestone in the execution of our Ambition 2025 strategy.”