TheCable

MTN Nigeria Plc achieved further accelerated growth in sales revenue from N471 billion in the first quarter, N479 billion in the second and N506 billion in the third, which add up to N1.46 trillion turnover for the telecommunications company in the nine months of operations in 2022.

This marks a rebound in quarterly revenue numbers for the company after a slowdown in the second quarter from 22 percent growth in the first quarter to 18 percent and pushing back to 22 percent in the third quarter.

The company’s interim financial report for the third quarter ended September 2022 shows that it is another strong year in the making with an increase of 20.7 percent in turnover from N1.21 trillion in the same period last year.

The company closed last year’s operations with turnover up by about 23 percent to N1.65 trillion. The renewed strength in the third quarter has brightened the prospects for a full-year turnover expectation in the region of N2 trillion for MTN Nigeria in 2022.

Data services continue to lead revenue growth for the third straight year, growing steadily from N163 billion in the first quarter to N185 billion in the second and N201 billion in the third quarter.

Revenue from voice services recovered from a slight decline in the second quarter to a 7 percent growth to over N209 billion for the third quarter. The share of data income in MTN’s total revenue has continued expanding from 34.5 percent in the first quarter to 38.7 percent in the second quarter and further to almost 40 percent in the third quarter.

Rising cost of funds remains a challenge for the company so far this year, rising by close to 35 percent in the third quarter to N55.7 billion for the quarter, beating the N50.6 billion finance cost in the second quarter.

In terms of growth, it is however a slowdown from 52 percent jump in finance expenses in the second quarter. Net finance expenses increased from N48 billion in the second quarter to N53.3 billion in the third but slowed down in terms of growth from 68.4 percent to 38.8 percent over the period.

The slowdown in cost of funds helped to prop up quarterly profit figure from N84.8 billion in the second quarter to N87.4 billion in the third after dropping from N97 billion in the first quarter.

Profit margin however keeps declining from quarter to quarter, as costs generally keep growing ahead of revenue. Net profit margin went down from 20.6 percent in the first quarter to 17.7 percent in the second and further to 17.3 percent in the third quarter.

Profit grew by 11.4 percent in the third quarter, about one-half of the 22 percent increase in turnover, reflecting major increases in cost of finance and cost of starter packs, handsets and accessories.

The company’s nine-month position shows that data services provided over N549 billion or 37.7 percent of the company’s revenue for the period, improving from 36.6 percent at half year. This is a marked growth of 50 percent over the corresponding figure of N366 billion in 2021. This remains the upside force for a 20.7 percent increase in revenue to N1.46 trillion at the end of the third quarter.

MTN Nigeria closed the third quarter operations with an after-tax profit of N269 billion, which is an increase of 22.3 percent over the N220.3 billion profit it posted in the same period last year.

The company’s nine-month position shows that cost moderation enabled it to grow profit slightly ahead of revenue. Net profit margin improved slightly from 18.3 percent in the same period last year to 18.5 percent at the end of September 2022, down however from 19.1 percent at the half year.

Two major cost increases account for the weakness in profit margin, which are finance expenses and cost of starter packs, handsets and accessories. The company paid N145.7 billion in finance expenses at the end of the third quarter, an increase of over 39 percent.

Also, inflation-driven cost of starter packs, handsets and accessories jumped more than four times to N15.3 billion at the end of the period.