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MTNN Plc Q3:2023 Earnings Note - Resilient Performance amidst Macro Headwinds

Resilient Performance amidst Macro Headwinds

Data Revenue Supports Revenue Growth

In its recently released Q3:2023 financial result, MTN Nigeria Communications Plc (MTNN) noted increased revenue, exceeding its growth from a year ago. Topline grew by 21.76% YoY to NGN1.77trn in Q3:2023 (vs. 20.71% YoY in Q3:2022). This improvement is underpinned by a modest expansion in Voice Revenue (11.80% YoY to NGN700.63bn), strong Data Revenue (36.25% YoY NGN748.30bn) and an uptick in Other Revenues (15.61% YoY to NGN324.02bn). Despite the upsurge in revenue, higher operating costs limited the pass-through to EBIT.

Data Revenue Leads the Pack, Shores Resilient Growth

In Q3:2023, data revenue was the largest contributor to MTNN’s overall revenue, constituting 42.21% of its overall sales, compared to 39.52% of voice revenue.

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 NGN326.50 (36.04% upside potential as of November 14th, 2023).

Provider
ARM Securities Limited
ARM Securities Limited

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. ​

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