MTN Nigeria’s Q3 2023 pre-tax profit plunges by 75.7% YoY

MTN Nigeria Communications Plc witnessed a substantial year-on-year decline in its profit before tax during the third quarter of 2023. According to the financial report released by the group for the period ending September 30, 2023, the company’s profit before tax plummeted by a staggering 75.7% to N32.08 billion. This marks a considerable decrease compared to the N132.04 billion it recorded in the third quarter of 2022.

While the profit before tax experienced a significant drop, MTN Nigeria’s revenue for the third quarter of 2023 stood at N614.2 billion. This represents a robust 21.4% year-on-year increase from the corresponding period in 2022. This impressive revenue figure contributed to the group’s nine-month revenue, which reached N1.78 trillion. This represents a notable increase of 21.76% year-on-year from the same quarter in 2022.

Key Financial Highlights for Q3 2023 compared to Q3 2022:
– Revenue: N614.2 billion, up by 21.4% year-on-year
– Direct network operating costs: N170.6 billion, up by 44.5% year-on-year
– Operating profit: N186.9 billion, up by 0.8% year-on-year
– Finance income: N4.7 billion, up by 311.5% year-on-year
– Finance costs: N159.5 billion, up by 192.8% year-on-year
– Net finance costs:
– Profit before tax: N32.1 billion, down by 75.7% year-on-year
– Profit for the period: N18.7 billion, down by 78.6% year-on-year
– Earnings per share: N0.93, down by 78.0% year-on-year
– Total assets: N3.078 trillion, up by 13.4% year-to-date

Insights from the Report:
In Q3 2023, data services accounted for the largest share of MTN’s revenue, generating N278.9 billion. This marks a significant year-on-year increase of 38.8% from the same period in 2022.

During the quarter, voice calls contributed N226.5 billion in revenue, SMS services generated N16.7 billion, and interconnect and roaming services added N43.1 billion in revenue.

The sharp year-on-year decline in the company’s pre-tax profit can be attributed to the considerable increase in net finance costs. These costs surged by a substantial 190.2%, rising from N53.3 billion in Q3 2022 to N154.8 billion in Q3 2023.

It’s important to note that these financial figures reveal a challenging period for MTN Nigeria in terms of profitability, despite the notable increase in revenue. The impact of rising finance costs has evidently taken a toll on the company’s overall financial performance during the third quarter of 2023. The decline in profit before tax is a significant concern and suggests the need for strategic financial management and cost control measures to stabilize the company’s financial health. As MTN Nigeria continues to navigate the complex telecommunications landscape in the country, it will be crucial to address these financial challenges and ensure sustainable growth and profitability in the future.