MTN Nigeria’s H1 2023 numbers were buoyed largely by double-digit growth in voice (12.1% y/y to N562.6bn) and data revenue (+34.9% y/y to N470bn), amidst inflationary growth in Operating Expenses (+18.8% y/y to N267.3bn). A net FX loss of N131.5bn contributed significantly to the decline witnessed in Pre-tax Profit, which declined by 25.4% y/y to N200.3bn in H1 2023 from N268.6bn in H1 2022.
We maintain our positive medium to long-term outlook on MTN Nigeria, we believe the company is well positioned to benefit from further growth in mobile and data penetration in Nigeria’s telecommunications industry. Additionally, the significant investments made by the firm in improving its 4G and 5G network infrastructure and expanding data coverage should attract new customers to its network.
We maintain our Buy recommendation on MTNN with a target price of N318.20/s. Our target price implies an upside potential of 14% compared to the last closing price of N274.40/s 0n 17 August. We arrived at our target price using a Discounted Cash Flow (DCF) and Relative valuation, assigning a weighting of 60:40.
