MTN Nigeria Communications Plc released its financial results for the nine months ending on September 30, 2024, reflecting both growth in certain areas and significant challenges due to economic and regulatory pressures. The company saw a decrease in its subscriber base, driven by the government-mandated NIN-SIM regulations, though data users grew alongside service revenue. Active mobile money wallets experienced a sharp decline, yet service revenue rose notably, despite a drop in EBITDA and the EBITDA margin. The loss after tax, driven largely by foreign exchange volatility, left earnings per share in negative territory, while free cash flow saw an improvement.
CEO Karl Toriola highlighted MTN Nigeria’s resilience in the face of difficult macroeconomic conditions. Inflation remained high during that period, averaging 32.8%, compounded by a steep naira depreciation. Rising energy prices and the Central Bank of Nigeria’s increased interest rate further pressured consumer spending and business operations. Nevertheless, improved forex liquidity eased some of MTN Nigeria’s exposure to foreign currency debt. Adapting to the impact of the NIN-SIM directive, the company prioritized reconnecting affected customers and continued driving operational efficiency and commercial growth across key revenue areas.
Commercial momentum remained strong, with revenue growth largely driven by rising demand for data services. Data usage per user increased as customers increasingly adopted digital services, while voice traffic also saw gains. MTN’s fintech division focused on enhancing wallet quality and user experience, expanding its MoMo PSB app to boost engagement. Cross-border remittances with 13 other African countries were introduced to drive adoption and increase revenue, supported by a wide network of agents and merchants.
Despite these gains, EBITDA was under pressure due to inflation and naira depreciation, though recent renegotiations of IHS Towers lease agreements led to operational savings that supported margin recovery. The company also reduced its outstanding U.S. dollar trade obligations significantly, lowering the impact of currency volatility on future earnings.
On the sustainability front, MTN Nigeria introduced biodegradable SIM cards as part of its Project Zero initiative, demonstrating a commitment to environmental responsibility. Through the MTN Foundation, the company continued to invest in healthcare, education, and community development projects, including refurbishing health centers, renovating science labs in public schools, and supporting female entrepreneurs through training programs.
Looking ahead, MTN Nigeria remains focused on improving profitability and restoring a positive capital position. Key initiatives include negotiating tariff adjustments with regulatory authorities, optimizing costs, and carefully managing capital expenditures to minimize forex risks. The renegotiated tower lease agreements, which will extend through 2032, are expected to positively impact on profitability, with projected benefits accruing over the contract’s duration. Through these efforts, MTN Nigeria aims to strengthen its financial standing, improve operational efficiency, and position itself for sustainable growth despite current economic headwinds.
