MTN NIGERIA COMMUNICATIONS : QUARTER 1 - FINANCIAL STATEMENT FOR 2024

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements

for the three months period ended 31 March 2024

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Contents

	Page
Financial highlights	2
Condensed consolidated and separate statement of profit or loss	3
Condensed consolidated and separate statement of other comprehensive income	4
Condensed consolidated and separate statement of financial position	5
Condensed consolidated and separate statement of changes in equity	7
Condensed consolidated and separate statement of cash flows	8
Notes to the condensed consolidated and separate financial statements	9 - 43

1

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Financial highlights

In millions of Nigerian Naira

Revenue Operating profit (Loss)/profit before taxation

(Loss)/profit for the period attributable to the owners of the company Basic and diluted (loss)/earnings per share (N)*

Share capital

Total equity attributable to the owners of the company Net liabilities per share (N)

Stock exchange information

		3 months	3 months	% Change
		ended 31	ended 31
Notes		March 2024 March 2023
6	752,983	568,136	32.54
	174,081	206,619	(15.75)
	(575,692)	162,914	(453.37)
	(390,668)	107,621	(463.00)
36	(18.63)	5.13	(463.00)
		As at 31	As at 31	% Change
		March	December
	2024	2023
	420	420	-
	(437,064)	(45,404)	862.61
	(20.85)	(2.17)	862.61

Market price per share as at period end (N)	232.00	240.00	(3.33)
Market capitalisation as at period end (N'million)	4,871,072	4,878,240	(0.15)
Number of shares issued and fully paid as at period end (millions)	20,996	20,996	-

The financial highlights reflect Group numbers only.

*Restated to reflect the changes in number of shares, see note 35.6

2

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Condensed consolidated and separate statement of profit or loss

		Group	Company
		3 months	3 months	3 months	3 months
		ended 31	ended 31	ended 31	ended 31
In millions of Nigerian Naira	Notes	March 2024	March 2023	March 2024	March 2023
Revenue	6	752,983	568,136	758,837	567,677
Direct network operating costs	10	(252,823)	(135,428)	(252,823)	(135,351)
Value added services costs		(8,847)	(7,105)	(8,847)	(7,105)
Costs of SIM starter packs, handsets and accessories		(12,915)	(6,311)	(12,915)	(6,311)
Interconnect costs		(49,054)	(37,173)	(49,054)	(37,173)
Roaming costs		(4,059)	(1,531)	(4,059)	(1,531)
Transmission costs		(4,212)	(2,087)	(4,212)	(2,087)
Discounts and commissions		(36,770)	(26,778)	(35,227)	(25,741)
Advertisements, sponsorships and sales promotions		(13,026)	(9,367)	(7,368)	(6,720)
Employee costs	9	(19,655)	(12,101)	(17,941)	(10,852)
Other operating expenses	11	(54,662)	(27,605)	(53,977)	(36,782)
Depreciation of property and equipment	13	(68,623)	(49,776)	(68,623)	(49,776)
Depreciation of right of use assets	14	(34,440)	(29,048)	(34,440)	(29,048)
Amortisation of intangible assets	15	(19,816)	(17,207)	(18,130)	(15,877)
Operating profit		174,081	206,619	191,221	203,323
Finance income	7	5,336	6,631	4,804	6,184
Finance cost*	8.1	(98,741)	(45,837)	(98,453)	(45,837)
Net foreign exchange loss*	8.2	(656,368)	(4,499)	(656,314)	(4,499)
(Loss)/profit before taxation		(575,692)	162,914	(558,742)	159,171
Tax credit/(expense)	12	182,998	(54,481)	178,275	(53,166)
(Loss)/profit for the period		(392,694)	108,433	(380,467)	106,005
(Loss)/profit attributable to:
Owners of the company		(390,668)	107,621	(380,467)	106,005
Non-controlling interest		(2,026)	812	-	-
		(392,694)	108,433	(380,467)	106,005
Earnings per share
Basic and diluted (loss)/earnings per share (N)	36	(18.63)	5.13	(18.15)	5.06

*See note 8.3

3

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Condensed consolidated and separate statement of other comprehensive income

In millions of Nigerian Naira

(Loss)/profit for the period

Items that may be reclassified to profit or loss

Fair valuation loss on investments designated at FVOCI*

Other comprehensive loss for the period net of taxation Total comprehensive (loss)/income for the period

Attributable to:

Owners of the company

Non-controlling interest

Group	Company
3 months	3 months	3 months	3 months
ended 31	ended 31	ended 31	ended 31
March 2024	March 2023	March 2024	March 2023
(392,694)	108,433	(380,467)	106,005
(516)	(1,195)	(212)	(1,195)
(516)	(1,195)	(212)	(1,195)
(393,210)	107,238	(380,679)	104,810
(391,184)	106,426	(380,679)	104,810
(2,026)	812	-	-
(393,210)	107,238	(380,679)	104,810

*Fair valuation loss on investments designated at fair value through other comprehensive income (FVOCI) is recognised on Federal Government treasury bills and bonds investments net of tax except for Federal Government bonds.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Condensed consolidated and separate statement of financial position

				Group	Company
In millions of Nigerian Naira		Notes		31 Mar 2024	31 Dec 2023	31 Mar 2024	31 Dec 2023
Assets
Non-current assets
Property and equipment	13	1,098,145	1,095,111	1,098,145	1,095,111
Right-of-use assets	14	545,980	478,826	545,980	478,826
Intangible assets	15	434,184	447,599	414,571	426,300
Investments in subsidiaries	16	-	-	100,378	100,378
Deferred tax asset	26.2	337,766	151,362	322,851	140,777
Other investments	17	8,076	6,632	7,459	6,632
Other non-current assets	18	34,779	33,516	34,779	33,516
			2,458,930	2,213,046	2,524,163	2,281,540
Current assets
Inventories	19	5,573	6,027	5,142	6,027
Trade and other receivables	20	333,183	215,414	359,467	239,692
Current investments	21	62,785	7,256	52,850	2,619
Restricted cash	23	407,256	402,010	400,569	394,209
Cash and cash equivalents	22	191,343	345,074	176,616	315,548
			1,000,140	975,781	994,644	958,095
Total assets			3,459,070	3,188,827	3,518,807	3,239,635
Equity and liabilities
Equity
Share capital	35.1	420	420	420	420
Share premium	35.2	166,362	166,362	166,362	166,362
Treasury shares	35.3	(4,869)	(4,869)	(4,869)	(4,869)
Other reserves	35.4	185	701	496	708
Accumulated loss			(599,162)	(208,018)	(508,309)	(127,842)
Equity attributable to owners of the company			(437,064)	(45,404)	(345,900)	34,779
Non-controlling interest			2,340	4,560	-	-
			(434,724)	(40,844)	(345,900)	34,779
Liabilities
Non-current liabilities
Borrowings	28	531,576	487,817	531,576	487,817
Lease liabilities	31	1,025,525	813,634	1,025,525	813,634
Deferred tax liability	26.1	749	1,149	-	-
Provisions	29	44	46	44	46
Employee benefits	30	10,981	9,703	10,981	9,703
Share based payment liability	34	17,836	16,910	17,836	16,910
			1,586,711	1,329,259	1,585,962	1,328,110

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MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Condensed consolidated and separate statement of financial position

					Group	Company
In millions of Nigerian Naira		Notes			31 Mar 2024	31 Dec 2023	31 Mar 2024	31 Dec 2023
Current liabilities
Trade and other payables	24	1,084,258	707,787	1,059,497	693,435
Current tax payable	27	161,777	157,971	161,468	157,669
Borrowings	28	611,801	689,352	611,801	689,352
Lease liabilities	31	290,661	190,777	290,661	190,777
Contract liabilities	25	94,090	102,796	93,708	102,414
Provisions	29	32,647	28,216	31,584	27,187
Deposit held for MoMo customers	32	1,823	7,601	-	-
Derivatives	33	30,026	15,912	30,026	15,912
			2,307,083	1,900,412	2,278,745	1,876,746
Total liabilities			3,893,794	3,229,671	3,864,707	3,204,856
Total equity and liabilities			3,459,070	3,188,827	3,518,807	3,239,635

The unaudited condensed consolidated and separate financial statements were approved by the Board of Directors on the 29 April 2024 and were signed on its behalf by:

Karl Toriola	Modupe Kadri
Chief Executive Officer	Chief Financial Officer
FRC/2021/002/00000022839	FRC/2020/001/00000020737

The accompanying notes form an integral part of the unaudited condensed consolidated and separate financial statements.

6

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Condensed consolidated and separate statement of changes in equity

	Share	Share	Total share	Treasury	Other	Retained	Total equity	Non-	Total
	capital	premium	capital	shares	reserves	profit	attributable to	controlling	equity
							owners of the	interest
In millions of Nigerian Naira							company
Group
Balance at 1 January 2023	407	17,216	17,623	(4,869)	1,664	246,679	261,097	1,445	262,542
Profit for the period	-	-	-	-	-	107,621	107,621	812	108,433
Other comprehensive loss	-	-	-	-	(1,195)	-	(1,195)	-	(1,195)
Balance at 31 March 2023	407	17,216	17,623	(4,869)	469	354,300	367,523	2,257	369,780
Balance at 1 January 2024	420	166,362	166,782	(4,869)	701	(208,018)	(45,404)	4,560	(40,844)
Loss for the period	-	-	-	-	-	(390,668)	(390,668)	(2,026)	(392,694)
Prior year adjustments - MoMo PSB	-	-	-	-	-	(476)	(476)	(194)	(670)
Other comprehensive loss	-	-	-	-	(516)	-	(516)	-	(516)
Balance at 31 March 2024	420	166,362	166,782	(4,869)	185	(599,162)	(437,064)	2,340	(434,724)
Company
Balance at 1 January 2023	407	17,216	17,623	(4,869)	1,664	297,524	311,942	-	311,942
Profit for the period	-	-	-	-	-	106,005	106,005	-	106,005
Other comprehensive loss	-	-	-	-	(1,195)	-	(1,195)	-	(1,195)
Balance at 31 March 2023	407	17,216	17,623	(4,869)	469	403,529	416,752	-	416,752
Balance at 1 January 2024	420	166,362	166,782	(4,869)	708	(127,842)	34,779	-	34,779
Loss for the period	-	-	-	-	-	(380,467)	(380,467)	-	(380,467)
Other comprehensive loss	-	-	-	-	(212)	-	(212)	-	(212)
Balance at 31 March 2024	420	166,362	166,782	(4,869)	496	(508,309)	(345,900)	-	(345,900)

7

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Condensed consolidated and separate statement of cash flows

		Group	Company
		3 months	3 months	3 months	3 months
		ended 31	ended 31	ended 31	ended 31
In millions of Nigerian Naira	Notes	March 2024	March 2023	March 2024	March 2023
Cash flows from operating activities
Cash generated from operations	37	620,388	296,004	630,548	291,260
Finance cost paid	8.1	(241,823)	(46,341)	(241,823)	(46,341)
Interest received	7	4,511	6,631	3,979	6,184
Net cash generated from operating activities		383,076	256,294	392,704	251,103
Cash flows from investing activities
Acquisition of property and equipment		(70,609)	(23,964)	(70,609)	(23,964)
Acquisition of intangible assets		(7,142)	(6,567)	(7,142)	(6,567)
Acquisition of right of use assets		(29,948)	(6,120)	(29,948)	(6,120)
Proceeds from disposal of property and equipment		435	226	435	226
Sale of investment in non-current FGN bonds		-	256	-	256
Purchase of bonds, treasury bills and foreign deposits		(55,092)	(49,109)	(49,424)	(49,056)
Sale of bonds, treasury bills and foreign deposits		-	22,284	-	22,284
Purchase of contract acquisition costs		(1,511)	(860)	(1,511)	(860)
Purchase of non-current FGN bonds		(1,421)	-	(804)	-
Increase in non-current prepayments		(1,455)	-	(1,455)	-
Increase in restricted cash		(6,360)	(12,152)	(7,474)	(12,152)
Net cash flows used in investing activities		(173,103)	(76,006)	(167,932)	(75,953)
Cash flows from financing activities
Proceeds from borrowings		3,350	129,320	3,350	129,320
Repayment of borrowings		(322,731)	(57,858)	(322,731)	(57,858)
Repayment on lease liabilities		(49,249)	(35,323)	(49,249)	(35,323)
Net cash flow (used in)/generated from financing activities		(368,630)	36,139	(368,630)	36,139
Net (decrease)/increase in cash and cash equivalents		(158,657)	216,427	(143,858)	211,289
Cash and cash equivalent at the beginning of the period		345,168	349,788	315,589	324,532
Effect of exchange rate fluctuations on cash held		4,888	(1,048)	4,888	(1,048)
	22
Cash and cash equivalents at the end of the period	191,399	565,167	176,619	534,773

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MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the three months period ended 31 March 2024

Notes to the unaudited condensed consolidated and separate financial statements

• General information

MTN Nigeria Communications Plc (the Company) together with its subsidiaries (the Group) carry on the business of building and operating GSM Cellular Network Systems and other related services nationwide in Nigeria.

MTN Nigeria Communications Plc subsidiaries are XS Broadband Limited, Visafone Communications Limited, Yello Digital Financial Services Limited and MoMo Payment Service Bank Limited. Their principal activities are the provision of broadband fixed wireless access service, high quality telecommunication services and mobile financial services (fintech) respectively. Visafone Communications Limited is currently undergoing liquidation.

All subsidiaries are fully owned by MTN Nigeria except for MoMo Payment Service Bank Limited (MoMo PSB) where MTN Nigeria holds 80% of shareholding while Acxani Limited holds 20% non- controlling interest.

2. Basis of preparation

These condensed consolidated and separate financial statements for the three months period ended 31 March 2024 have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) 34 Interim Financial Reporting.

The condensed consolidated and separate financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, this report is to be read in conjunction with the audited annual financial statements for the year ended 31 December 2023 which has been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS and with the requirements of the Financial Reporting Council of Nigeria (FRC) Act 2011 and Companies and Allied Matters Act of Nigeria (CAMA) 2020.

The condensed consolidated and separate financial statements are presented in Naira and rounded to the nearest millions, except where stated otherwise.

The accounting policies applied in the preparation of the condensed consolidated and separate financial statements are consistent with those followed in the preparation of the Group's consolidated and separate financial statements for the year ended 31 December 2023.

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments and interpretations apply for the first time in 2024, but do not have an impact on the condensed consolidated and separate financial statements of the Group.

3. Basis of measurement

The condensed consolidated and separate financial statements have been prepared under the historical cost basis except for derivatives measured at fair value and debt instruments measured at Amortised cost, fair value through profit or loss (FVTPL) and at fair value through other comprehensive income (FVOCI) and for the following items which have been measured on an alternative basis on each reporting date:

• Defined benefit obligations at present value of the obligation.
• Shared based transactions at grant date fair value of the equity instrument issued.
• Inventory at lower of cost and net realisable value.
• Lease liabilities at present value of future lease payments

4. New standards and interpretations

4.1 New and amended standards adopted by the Group

Several amendments apply for the first time in 2024, but do not have an impact on the interim condensed consolidated financial statements of the Group. The amendments are set out below:

1. Classification of Liabilities as Current or Non-current - Amendments to IAS 1.

In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

1. What is meant by a right to defer settlement
2. That a right to defer must exist at the end of the reporting period
3. That classification is unaffected by the likelihood that an entity will exercise its deferral right
4. That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

9