MTN Nigeria has reported a 166% increase in profit for the first quarter, buoyed by strong gains in subscriber and data user numbers and a firmer naira.
The company reported earnings before interest, tax, depreciation and amoritisation (ebidta) rose by 68.1% in the quarter ended March to 828.3-billion naira (about R10bn), with the ebitda margin increasing by 8.7 percentage points to 55.3%.
Profit after tax rose by 165.9% to 355.5-billion naira.
CEO Karl Toriola said the group’s commercial performance remained strong, underpinned by robust underlying trends across customer additions, consumption patterns, and data traffic.
“We added 2.3-million revenue-generating subscribers and 1.8-million active data users in Q1, while data traffic grew by 22.9%,” he said.
Total subscribers increased by 6.5% to 89.5-million, while active data users rose by 9.5% to 55-million. Service revenue increased by 41.8% to 1.5-trillion naira.
While the operating environment is expected to remain dynamic, our strong market position, resilient business model and disciplined execution provide a solid foundation to navigate near-term uncertainties
— Karl Toriola, MTN Nigeria CEO
He said elevated geopolitical tensions towards the end of the quarter drove higher energy prices and renewed inflationary pressures.
Toriola said encouragingly, this was partly mitigated by a relatively stronger naira, which closed at N1,387/$ at the end of March compared with N1,436/$ at the end of the December quarter.
“Within this context, we sustained strong commercial momentum, maintained disciplined cost management and accelerated investment in our network — translating underlying demand into robust financial performance and continued value creation. As a result, we delivered service revenue growth and ebitda margin performance in line with our medium-term guidance."
The company invested 390.3-billion naira in capex excluding leases, prioritising network capacity and quality of experience.
“The more supportive FX backdrop enabled us to accelerate this investment while strengthening our ability to capture future revenue opportunities,” he said.
MTN Nigeria is progressing with the structural separation of its fintech businesses, MoMo Payment Service Bank and Y’ello Digital Financial Services, through a proposed related party transaction with MTN Group Fintech Holdings. Under the proposed transaction, MTN Group Fintech will acquire a 60% interest, with MTN Nigeria retaining 40%.
The transaction involves a capital injection of 152.1-billion naira by MTN Group Fintech. The deal is expected to reduce MTN Nigeria’s future funding obligations, strengthen balance sheet flexibility and allow increased focus on core connectivity and digital infrastructure while retaining exposure to fintech growth, it said.
It is subject to regulatory and shareholder approval.
The group temporarily suspended its airtime and data credit advance service (Xtratime). This was related to the implementation of processes under the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, which introduced a new compliance and licensing framework for entities providing digital or non-traditional consumer credit services.
“We are advancing the onboarding of approved providers and expect to resume the service once onboarding is completed. In the interim, customers continue to have access to alternative digital channels for airtime and data purchases.
“Following the initial impact of the suspension, recharge patterns have continued to normalise as affected customers settle outstanding balances and maintain service usage. This has supported a progressive recovery in revenue driven by higher self-funded recharges. We continue to monitor these trends closely and will provide further updates in Q2,” it said.
Based on current recovery trends, it does not expect any material financial impact as it fast-tracks the required processes toward service resumption.
Toriola said the company remains confident in the structural demand drivers underpinning the business, including rising data adoption, increasing smartphone penetration and the continued acceleration of digitalisation across Nigeria.
“While the operating environment is expected to remain dynamic, our strong market position, resilient business model and disciplined execution provide a solid foundation to navigate near-term uncertainties,” he said.
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