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

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% Year-on-Year (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

Earnings before Interest Expense, Taxes, Depreciation and Amortization (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 positive stance on MTN Nigeria Communications Plc. and retain a “STRONG BUY” recommendation, with a revised target price of NGN340.46 (21.59% profit potential as of August 7th, 2023).

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