MTN Nigeria Market Valuation Spikes to N5.11trn

MTN Nigeria Market Valuation Spikes to N5.11trn

Telecommunication giant, MTN Nigeria Plc, has maintained the lead as its market valuation crossed N 5 trillion at the end of May 2023.  In the local bourse, its share price jumped moderately to N251 on Wednesday after healthy earnings in the first quarter of 2023.

In the first quarter of the year, the telecom company grew profit to N101.3 billion from about N97 billion in the first quarter of 2022. MTN Nigeria’s earnings per share surged 3.8% year on year to N4.94 amidst a decline in capital expenses. In the period, capital expenditure (Capex) declined by 25.8% to N120.5 billion.

Its profit before tax (PBT) grew by 8.5% to N155.8 billion, tracked behind the average inflation growth rate in Nigeria. It however reported that mobile subscribers increased by 9.4% to 76.7 million.

Also, its active data users increased by 14.7% to 41.2 million. At analysts’ conference, management said the first quarter of the year remained challenging due to the rising food and energy inflation, supply chain challenges, and local currency and foreign exchange availability.

However, as the rest of the year unfolds, the telco revealed a plan to continue to invest, supporting the resilience and growth of its business, taking advantage of opportunities embedded within connectivity and platform businesses such as fintech.

Detail from its unaudited result showed that service revenue grew by 20.5% on solid voice, data, fintech, and digital services growth. This was supported by the increased subscriber base and usage of services.

Also, the telecom company’s mobile subscriber base rose 9.4% to 76.7 million, the highest level since operations commenced in 2001. However, the cash shortages experienced during the period impacted customers.

Karl Toriola, MTN Nigeria CEO, said “We continued to experience headwinds in our operating environment in the first quarter of 2023”.

He said the impacts of the ongoing global macroeconomic and geopolitical developments on energy, food, and general inflation were exacerbated locally by petrol and cash shortages experienced during the period.

“This placed additional pressure on economic activity, consumers, and businesses. The private sector experienced the deepest contraction in March 2023 since the recovery from the COVID-19 pandemic, driving down the PMI index to 42.3 points from 44.7 points in February 2023.

“The inflation rate in Nigeria rose to a 17-year high of 22% in March 2023, representing the third consecutive month-on-month increase in 2023, with an average of 21.9% in the quarter.

“In addition, supply chains were compounded by exchange rate volatility and the availability of foreign currency needed for capex”. Toriola said the company continued to expand broadband access to drive digital inclusion.

At the Annual General Meeting held in April, the shareholders approved a final dividend of N203.5 billion or N10 per share. At N15.6% per share, total dividend for 2022 surged to N317.5 billion, up 18.9% from 2021, demonstrating economic value added to our shareholders.

At the AGM, MarketForces Africa reported that shareholders also approved a scrip dividend option as an alternative form of shareholder return to a cash dividend.

Following the outcome of the scrip dividend election exercise, 641,047,053 new ordinary shares representing 79.8% of the 2022 final dividend will be issued and allotted once all requisite regulatory approvals have been obtained.

MTN Nigeria said active data subscribers rose by 1.7 million, benefitting from efforts to drive data conversion in new and existing subscribers. During the quarter, management focused on enhancing the capacity and coverage of our 4G and 5G networks, which supported rising data traffic, according to a statement.

“Our total data traffic increased by 50.3%, while 4G traffic constitutes 81.6%. In addition, we rolled out additional 170 5G sites in Q1, bringing the population coverage to 4% and expanding the network experience to more smartphone users.

“We continued to progress in building our fintech ecosystem and executing its growth strategy by reopening the Nigerian Interbank Settlement System (NIBSS) interface for inbound and outbound transfers and strengthening our control systems, enabling us to accelerate full commercial activities and grow active wallets”.

As a result, active MoMo PSB wallets rose by 1.2 million in Q1 to 3.2 million, accounting for 43.2% of the company’s fintech users.  However, the impact of the cash shortages during the period slowed over-the-counter transactions, resulting in a 31.1% reduction in our total fintech users to 7.4 million. #MTN Nigeria Market Valuation Spikes to N5.11trn

FIRS Boosts Nigeria’s Tax-to-GDP Ratio to 10.86%