MTNN Plc H1:2023 Earnings Note - FX Devaluation limits Bottomline Growth
FX Devaluation limits Bottomline Growth
Data Revenue Propels Revenue Expansion
In its recently released H1:2023 financial result, MTN Nigeria Communications Plc (MTNN) posted a higher revenue figure, exceeding its growth level from the previous period. Total revenue grew by 21.96% YoY to NGN1.16trn in H1:2023 (vs. 20.07% YoY in H1:2022), underpinned by strong data revenue growth (+34.79% YoY to NGN469.38bn), improved voice revenue (+13.62% YoY to NGN474.10bn) and other services revenue (+16.62% YoY to NGN215.26bn).
We see a similar trend in MTNN’s quarterly performance, as revenue expanded by 23.27% YoY to NGN590.61bn in Q2:2023 (vs. 18.02% YoY in Q2:2022). This growth was largely underscored by solid data revenue performance (+30.30% YoY), a rebounding voice revenue (+19.39% YoY), and other services revenue (+17.68% YoY).
Operating Profit: Muted Impact of FX Revaluation on Tower Contracts
EBITDA climbed higher, albeit at a slower pace, by 20.64% YoY to NGN614.45bn in H1:2023 (vs. 22.08% YoY in H1:2022). This was underpinned by the acceleration of total operating expenses (+25.64 YoY in H1:2023 vs. +12.42% YoY in H1:2022).
After considering the factors outlined, we maintain our bullish stance on MTN Nigeria Communications Plc. and retain a "STRONG BUY" recommendation, with a revised target price of NGN340.46 (21.59% upside potential as of August 7th, 2023).
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.