MTN Nigeria Communications’ first quarter trading results do not paint a rosy picture with subscriber numbers impacted by tighter government data controls and a net loss was reported due to further foreign exchange related losses.
The group, which holds parent MTN’s biggest number of subscribers by country, increased its subscriber tally by 1.3% to 77.7 million in the quarter to March 31, but the figure was down by 2 million over the fourth quarter of 2023, due to the NIN-SIM directive, the telecoms group’s directors said in a trading update Tuesday.
The NIN is a digital identity unique to the cellphone SIM holder. It is used to match the individual with his or her biometrics (fingerprint and facial) data.
Active data users increased 8% to 44.5 million, but declined by 78 000 compared with the fourth quarter of 2023.
The net loss after tax and adjusting for forex losses declined by 57% to N47.1 billion.
The quarterly net loss increased the accumulated losses and negative shareholders funds to N599.2bn (R8.23bn) and N434.7bn (R5.98bn), respectively.
Positive free cash flow was 35.6% lower at N117.2bn when compared with the first quarter of the 2023 financial year.
CEO Kari Toriola said that rising inflation and continuing depreciation of the Naira off an already low base had created a very challenging business environment.
Inflation rose to 33.2% in March, and average inflation for the quarter was 31.6%. The Naira reached an all time low of N1 627 per US dollar in March from N907/US$ at the end of December.
“Notwithstanding these headwinds, we recorded increased activity within the base, with voice traffic rising 5.1% and data traffic by 40.5%.” He said this was due to good demand for data and voice supported by attractive offers and continuing investment.
On the outlook, he said, however, high inflation and unpredictable foreign exchange rate movements remained significant challenges.
Management was focused on accelerating service revenue growth, unlocking operational efficiencies and strengthening the balance sheet.
“We do, however, require regulatory tariff increases to restore the profitability of the company,” Toriola said.
To improve the capital position of the group, talks were underway with authorities regarding tariff increases, measures were being implemented to recover lost profit margins, and capital expenditure would be cut in 2024.
Various exposures to the US dollar were being reduced where possible, and discussions with service providers were taking place regarding changes to tower lease contracts.
BUSINESS REPORT