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Below is a detailed overview of the financial performance of MTN Nigeria Communications Plc during the 2023 full year.

Strong Revenue Growth Offset by Higher Costs

In its recently released 2023 full year (FY) financial result, MTN Nigeria Communications Plc (MTNN) observed higher revenue figures on a Year- on-Year (YoY) basis, recording a 22.69% YoY growth to NGN2.47trn in 2023FY. Topline growth was underpinned by a robust growth in Data Revenue (+39.90% YoY to NGN1.07trn), followed by an increase in Other Revenue (+16.01% YoY to NGN445.14bn) which consists of ancillary income streams such as rental income, digital revenue, etc. Voice revenue grew at a slightly faster pace by 10.45% YoY to NGN954.99bn (vs. +6.01% YoY in 2022FY). Net finance costs increased by 377.38% YoY to NGN951.55bn in 2023FY. This significant growth can be attributed to large foreign exchange (FX) losses, to the tune of NGN740.43bn during the period.

Data Revenue Spearheads Growth Despite Macro Headwinds

In 2023FY, Data Revenue contributed to 43.29% of total Revenue. Following closely was Voice Revenue (38.68%) and Other Revenue (18.03%).

After considering the factors outlined, we posit a less bullish stance on MTN Nigeria Communications Plc. but retain an “OVERWEIGHT” recommendation, with a revised target price of NGN247.70 (11.88% upside potential as of March 11th, 2024).

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