Revenue Growth: The company also experienced growth in all of its revenue lines including Voice, Data, FinTech and Digital revenue respectively.
Voice and Data alone contributed N318.9 billion and N349.5 billion representing a 14.9% and 53.4% growth respectively.
MTN also reported weaker EBITDA with N296.9 billion down 1.9% as EBITDA margins fell to 39.4% compared to 53.3% same period last year.
The company stated that the challenging operating environment citing rising inflation and continuous depreciation of the naira.
“The operating environment in the first quarter remained very challenging, with rising inflation and continued naira depreciation off an already low base. The naira depreciated to an all-time low of N1,627/US$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) in March, from N907/US$ at the end of December 2023, before moderating to N1,309/US$ by the end of the quarter. Additionally, the inflation rate maintained an upward trajectory, rising to 33.2% in March, with an average rate of 31.6% in the quarter.”
MTN’s Outlook
“Continued elevated inflation and unpredictable foreign exchange rates remain significant challenges for businesses. However, we remain focused on sustaining our commercial momentum, accelerating our service revenue growth, unlocking operational efficiencies, and strengthening our balance sheet to improve the profitability of our business. We do, however, also require regulated tariff increases to restore the profitability of the Company.”
Way forward
MTN reports it plans to grow revenues faster, repair margins, as well as rebuild reserves to
strengthen our balance sheet position by tariff increases, improving margins, optimize capex and reduce forex exposure.
We are focused on reducing the various exposures our business has to US$ volatility. One key area is the Company’s outstanding letters of credit (LC) obligations, which contribute to the volatility in our earnings through FX losses reported in our income statement. These obligations were raised in support of our capex requirements which are largely foreign currency denominated. In this regard, we have utilised the improved liquidity in the FX market to reduce the balance of outstanding LC obligations to US$243.4 million as at 31 March 2024, from US$416.6 million as at 31 December 2023.
