Profitability has yet again prevented MTN Nigeria, the country’s largest telecommunication company, from reporting favourable results in its nine-month report for 2024.
The telecoms firm, which now boasts 77 million subscribers—after losing 2.7 million to NIN-SIM regulations—posted a ₦514 billion loss after tax year-on-year, compared to a loss of ₦14 billion in the corresponding period of 2023.
The company’s performance was impacted by adverse macroeconomic conditions, including currency devaluation, rising energy costs, and inflation. The introduction of VAT on tower leases further exacerbated the situation.
MTN Nigeria reduced its outstanding trade line obligations in dollars to $57 million, down significantly from $416.6 million as of 31 December 2023. It will increase its tariff, renegotiate lease agreements and implement an expense efficiency programme to drive down costs.
Despite a few bleeding items on its balance sheet, data is king. MTN recorded ₦2.37 trillion in revenue year-on-year, 33% higher than ₦1.77 trillion reported in the nine months of 2023. The strong performance was driven by data which led over 50% of the Nigerian subsidiary’s revenue, solidifying data’s dominance over voice.
Key takeaways
- MTN has 77 million mobile subscribers as of September 2024
- Active data users increased by 5.1% to 45.3 million in 9 months
- Active mobile money (MoMo PSB) wallets decreased by 21.8% to 2.8 million in 9 months
- Loss after tax was ₦514.9 billion as of September 2024
- Positive free cash flow of ₦536.8 billion an increase of 21.9%
Data revenue grew to ₦1.1 trillion, overtaking voice revenue contributions to ₦949 billion. The telco experienced a 42.1% increase in data traffic. In addition, data usage per user grew by 31.2% to 11.3GB, supported by the rising demand for data and digital services, which has contributed to revenue growth.
Fintech revenue grew to ₦76 billion, with a 21.8% drop in active mobile money wallets. The decision to streamline incentive structures in MoMo’s sales and distribution channels plus reduce acquisition costs led to a drop in numbers. The latest introduction of a cross-border product could lead to a future uptick in the mobile money service.
MTN group’s share price is up 1.45% today, hours ahead of its nine-month earnings call on Thursday. While that should cheer investors, a negative shareholders fund of ₦573.6 billion is sure to upset them. At its last AGM, the board promised shareholders dividends in 2025.
Trading in the shares of its Nigerian subsidiary has been restricted for 24 hours in respect of the closed period—a period after earnings are released.
“The higher inflation and interest rates weighed on consumers’ spending power and impacted business activity. However, we remain focused on enhancing operational efficiency and driving the growth of our commercial operations,” said Karl Toriola, MTN Nigeria’s CEO.
“Effects of the Nigerian Communications Commission’s (NCC) industry-wide NIN-SIM directive impacted the evolution of our customer base. Having implemented the directive, we continue our drive towards reconnecting those affected to reduce churn while extracting increased value from the market. “
