Q3 2023 Results: MTN Nigeria revenue rises 21.76% y-o-y but witnesses a 75.7% dip in PBT

MTN Nigeria Communications Plc faced a significant decline in its profit margins for the third quarter of 2023. Despite a commendable revenue generation, the company’s profit before tax witnessed a severe dip of 75.7% year-on-year. This was due to the removal of the fuel subsidy, currency devaluation from forex liberalisation, and impacts of the 2023 Finance Act which led to rising inflation rates.

Here’s an in-depth analysis of the company’s financial performance for Q3 2023, juxtaposed against its Q3 2022 results.

Financial Overview:

• Profit Before Tax: In Q3 2023, the profit before tax stood at N32.08 billion, marking a stark decrease of 75.7% from N132.04 billion in Q3 2022.
• Revenue: MTN recorded a revenue of N614.2 billion in Q3 2023. This indicates a 21.4% year-on-year increase from the same period in 2022.
• Nine-Month Revenue: The group’s revenue for the first nine months of 2023 reached N1.78 trillion, showcasing a 21.76% rise year-on-year from Q3 2022.

Key Highlights:

• Mobile subscribers increased by 4.8% to 77.6 million; Added 2 million subscribers in 9M 2023
• Active data users increased by 13.3% to 43.1 million; Added 3.6 million active users in 9M 2023
• Active mobile money (MoMo PSB) wallets increased by 53.1% to 3.6 million; Added 1.6 million active MoMo PSB users in 9M 2023

Revenue Breakdown:

For Q3 2023, MTN’s revenue distribution underwent notable changes.

• Data: Contributed the most to MTN’s revenue at N278.9 billion, marking a significant year-on-year growth of 38.8% from Q3 2022.
• Voice Calls: Generated revenue amounted to N226.5 billion.
• SMS: Stood at N16.7 billion.
• Interconnect and Roaming Services: Accounted for N43.1 billion in revenue.

Key Takeaway:

The drastic year-on-year decrease in the company’s pre-tax profit can be attributed to the net finance costs. These costs surged by an alarming 190.2% from N53.3 billion in Q3 2022 to N154.8 billion in Q3 2023.

In conclusion, while MTN Nigeria Communications Plc saw an encouraging rise in its revenue, escalating finance costs impacted its profit margins. The company needs to strategize to navigate the financial challenges it faces, ensuring sustainable growth in the forthcoming quarters.