July 31, 2024/CSL Research
In its recently released unaudited H1 2024 results, MTN Nigeria sustained its Revenue growth momentum, reporting a 32.8% y/y growth in Revenue to N1.54tn from N1.16tn in H1 2023. On a q/q basis, Revenue increased by 4.4% to N786.14bn in Q2 2024 from N752.98bn recorded in Q1 2024. The growth in Service Revenue (up 32.6% y/y) remained the major driver of the rise in Total Revenue.
Data revenue surged by 54.7% y/y, reaching N727.33bn in H1 2024, up from N470.02bn in H1 2023. This growth was driven by an increase in the company’s user base and higher data usage fuelled by improvements in service quality. The company reported an 11.1% y/y increase in data users, bringing the total number of data users to 45.6 million at the close of H1 2024. Furthermore, the 4G network now covers 82.0% of the population, up from 81.5% in December 2023, while 5G coverage has expanded to 12.7%, up from 11.3% in December 2023.
Voice revenue increased by 12.4% y/y, rising to N632.38bn in H1 2024 from N562.69bn in H1 2023. The company attributed this growth to higher user activity and an expanding subscriber base, driven by customer value management initiatives, enhanced service quality, and revamped voice offerings. The subscriber base grew by 2.9% y/y, with the addition of 2.3 million subscribers, bringing the total to 79.4 million in H1 2024. Additionally, Fintech revenue rose by 11.0% y/y to N48.41bn, while Digital revenue saw a significant increase of 98.9% y/y, reaching N30.44bn H1 2024.
MTN NIGERIA H1 2024
Source: Company data, CSL Research |
Direct Network Operating Costs grew faster than Revenue, increasing by 111.9% y/y to N586.80bn in H1 2024, up from N276.96bn in H1 2023. Operating Expenses also rose significantly, increasing by 51.4% y/y to N404.63bn from N267.33bn over the same period. This rise in OPEX is attributed to elevated inflation, high energy costs, and the persistent devaluation of the Naira. As a result, EBITDA decreased by 10.9% y/y, falling to N547.69bn in H1 2024 from N614.45bn in H1 2023 while the EBITDA margin contracted by 17.44 bps to 35.6% in H1 2024. Operating Profit declined by 27.7% y/y to N304.55bn, down from N421.04bn in H1 2023. Additionally, Depreciation and Amortization expenses increased by 25.72%, reaching N243.15bn in H1 2024.
Net Finance Costs surged by 95.96% y/y, reaching N168.16bn in H1 2024, up from N85.81bn in H1 2023. This increase reflects a 79.1% y/y rise in Finance Costs and a decline of 8.9% in Finance Income. The drop in Finance Income was due to lower interest earnings on investments, while the rise in Finance Costs stemmed from higher interest expenses on borrowings and leases. Additionally, the company experienced a substantial increase in FX losses, driven by the further devaluation of the Naira, resulting in FX losses of N887.68bn in H1 2024 compared to N454.67bn in H1 2023.
These FX losses contributed to a 529% increase in the Pre-Tax Loss, which reached N751.29bn in H1 2024, compared to N119.43bn in H1 2023. Despite reporting a Tax Credit of N232.23bn in H1 2024, up from N33.84bn in H1 2023, the company still recorded a Net Loss of N519.06bn in H1 2024, significantly higher than the N85.5bn Loss reported in H1 2023.
Our estimates are under review. Current Price; N200/s.
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CSL MTN Nigeria Earnings Quick Take H1 2024 .pdf
