MTN Nigeria Pre-Tax Profit Rises By 22.3% in 2022
MTN Nigeria Plc has released its annual financial results for the year ending 31st December 2022. The company recorded a profit before tax of N533.972 billion, a 22.3% increase from the N436.689 billion reported during the same period in 2021. The company recorded a revenue of N2.012 trillion in FY 2022, up by 21.6% from the N1.654 trillion revenue recorded in FY 2021.
As one of Nigeria’s most valuable companies in terms of market capitalization, MTN Nigeria Plc is also the country’s most profitable company. The company which is majorly owned by MTN International Limited with a 76% stake is also the largest subsidiary of MTN International and is one of Nigeria’s largest taxpayers.
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Commenting on the FY 2022 financial results, the CEO of MTN Nigeria Plc, Karl Toriola stated that irrespective of the torrid business atmosphere in Nigeria in 2022, the firm continued to invest in the resilience of their business and networks. He noted, “We continued to manage and invest in the resilience of our business and networks, expanding coverage and capacity with a focus on expense efficiencies and disciplined capital allocation.”
The company recorded revenue of N2.012 trillion with the number one contributor being voice revenue which grew by 6.8% from 2021 to hit N1.036 trillion. MTN recorded data revenue of N764 billion, up by 46.9% from FY 2021. The growth in data revenue was driven by the growth of active data users and increased 4G usage. According to the report, MTN’s data traffic grew by 65.6% and 79.5% of the network’s data traffic was on the 4G spectrum. The company also added 5.5 million smartphones to its network in 2022.
The company also recorded a revenue of N84.396 billion from its Fintech. According to Mr. Toriola, “We continued to progress in building our fintech ecosystem and executing its growth strategy with the commercial launch of our MoMo PSB in May 2022. Our active fintech users rose by 5.5 million to 14.9 million, of which approximately 2 million are active MoMo wallets.”
The company’s Fintech revenue rose by 19.6% as the company recorded an 18.3% growth in Xtratime which is MTN’s airtime lending product. MTN’s Fintech rose to 14.9 million and 2 million of this number were active Momo wallet users.
The company recorded digital revenue of N22.047 billion, up by 64.1% from the N13.439 billion recorded in 2021. The company recorded 10.3 million active digital users, with the Ayoba instant messaging platform accounting for over 50% of that number.
MTN recorded a growth in mobile subscribers from 68.5 million to 75.6 million, representing an increase of 10.5%. The network also recorded a growth in data subscribers from 34.3 million in 2021 to 39.5 million in 2022.
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With the growth in revenue came a corresponding growth in expenses, as the company recorded a 21.2% growth in expenses from N777 billion in FY 2021 to N941.907 billion in FY 2022. The company’s EBITDA rose to N1.070 trillion up by 22.0% from N877 billion in 2021. When depreciation and amortization, as well as finance costs, were taken out, MTN’s profit before tax rose to N533.972 billion. The company’s tax expenses were about N175 billion leaving a profit after tax of about N358.877 billion.
Operating Environment Reports
In April 2022, the NIN SIM linkage policy by the NCC affected about 19 million MTN subscribers leading to a fall in voice revenue in Q2 2022. However, by Q3 2022, the recovery process started as more subscribers registered for their NIN or got new SIMs. MTN also supported NIMC’s efforts by providing over 9,600 NIN enrollment points.
According to Karl Toriola, “2022 was challenging due to global macroeconomic and geopolitical volatility, resulting in higher inflation, supply chain uncertainties, foreign exchange volatility, and availability.” 2022 was also laden with a rising inflation rate in Nigeria, as the country recorded average inflation of 18.8% in 2022, as well as rising exchange rates. The rising inflation plus Naira depreciation led to an increase in MTN’s operating expenses by 18.8% in 2022.
MTN became the first to launch the 5G network in Nigeria. The 5G network which was launched in September 2022 is now available in 588 sites across 7 states in Nigeria.
The company is a participant in the Federal Government’s Road Infrastructure Tax Credit (RITC) scheme. Under the scheme, MTN is tasked with the reconstruction of the 110km Enugu-Onitsha expressway in South-East Nigeria.