Y'ello in the Green 💰💰
MTN Nigeria released its 2022 financial results with a total revenue of N2.021 trillion, setting a new record for Nigerian listed companies. The company saw growth in all its major business lines with voice, data and financial services (think MoMo agents and that credit you borrowed last year) growing 7%, 47%, and 20% respectively. MTN recorded a net income of N358 billion, a 20% increase in profits year-on-year.
Despite the increasing adoption of data services, voice call still accounted for half of all revenue at N1 trillion, with data accounting for 38% of revenue, up from 31% in 2021. Total Fintech revenue was N84 billion.
When looking at the adoption rate, MTN saw a 10.5% increase in voice subscribers (FY2022: 75.6 million users), a 15.3% increase in data subscribers (FY2022: 39.5 million) and a 50% increase in Fintech customers (14.9 million).
For the growth in voice users, the company highlighted its use of innovative solutions to address churn rate and increase usage by existing customers. It basically kept new customers from leaving and got current users to call more. (Now we understand why they show "pulse points" after a call, and not account balance)
In the data category, they credited their growth to their customers' increased 4G coverage and rise in the use of smartphones. They also recorded growth in fixed broadband usage and began deploying their 5G network.
Fintech growth was driven by increased MoMo usage and Xtratime (credit borrowing). The yellow giant also had growth in other revenues driven by more advertising efforts and increased use of their messaging platform Ayoba.
So What?
MTN has shown that to succeed in the Nigerian business environment, you need to be agile and able to respond effectively. The company has been able to focus on its core business (Voice and Data) while also developing other lines of business that are positioned to generate revenue.
Taking a closer look, we see that their voice market is the most valuable by gross value. However, on a per-customer basis, data has N19,400 per customer while voice has N13,700 per customer; hence the focus is on driving data adoption among its customers.
The company has shown interest in converting more voice-only customers to data customers. Looking at its cost structure, the company has maintained its cost discipline, the only outlier being its finance cost driven by dollar-denominated rent and increased financing cost.
The company faced many challenges in 2022, but its ability to continue positioning itself as a necessity has been the driving force of its business.
Here is a link to the entire financial report for your reading pleasure.