MTN Nigeria Communications (MTNN) Q3 2024 earnings summary

Executive summary

• Service revenue grew 33.6% year-over-year to N2.4 trillion, led by data, voice, fintech, and digital services despite macroeconomic and regulatory headwinds.

• Total subscribers declined 0.9% to 77.0 million due to NIN-SIM regulations, while active data users rose 5.1% to 45.3 million.

• Loss after tax was N514.9 billion, mainly from significant forex losses; adjusted PAT (excluding forex loss) was N118.5 billion, down 59.2%.

• Positive free cash flow increased 21.9% to N536.8 billion, supported by lower capex and working capital improvements.

• EBITDA declined 5.3% to N860.2 billion, with margin down 14.9pp to 36.3% due to naira depreciation, higher energy costs, and VAT on leases.

Financial highlights

• Data revenue surged 52.3% year-over-year, with data usage per user up 31.2% to 11.3GB and data traffic up 42.1%.

• Voice revenue increased 13.8%, fintech revenue up 18.0%, and digital revenue more than doubled (up 103.1%).

• Capex (excluding leases) fell 27.8% to N217.6 billion; total capex rose 238% due to right-of-use asset increases from tower lease renegotiation.

• Net finance costs (excluding forex losses) rose 98.5% due to higher interest rates and lease balances.

• Net debt-to-EBITDA ratio at 0.7x, with 43% of debt fixed-rate and 57% floating; cash balance at N192.4 billion.

Outlook and guidance

• Service revenue growth for FY 2024 expected in the high-20% to low-30% range; EBITDA margin guidance raised to 35–37%.

• Capex intensity for FY 2024 revised to low teens percent, reflecting increased investment to support data growth.

• Focus remains on margin recovery, cost efficiency, and restoring net asset position, with ongoing engagement on tariff increases.

• Anticipates continued macroeconomic pressures, but expects constructive outcomes from industry tariff discussions.