MTN NIGERIA COMMUNICATIONS : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements

for the nine months period ended 30 September 2023

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

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	6
Condensed consolidated and separate statement of cash flows	7
Notes to the condensed consolidated and separate financial statements	8 - 43

1

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

Financial highlights

			9 months	9 months	% Change
			ended 30	ended 30
			September	September
In millions of Nigerian Naira	Notes	2023	2022
Revenue	6	1,772,949	1,456,135	21.76
Operating profit		608,426	537,679	13.16
Profit before taxation		232,469	400,673	(41.98)
Profit for the period attributable to the owners of the company		148,091	270,339	(45.22)
Basic/ diluted earnings per share (N)*	36	7.06	12.89	(45.22)
			As at 30	As at 31	% Change
			September	December
		2023	2022
Share capital		420	407	3.15
Total equity attributable to the owners of the company		309,367	334,237	(7.44)
Net assets per share (N)*		14.75	16.44	(7.44)
Stock exchange information
Market price per share as at period end (N)		264.00	215.00	22.79
Market capitalisation as at period end (N'million)		5,542,944	4,376,325	26.66
Number of shares issued and fully paid as at period end (millions)*		20,996	20,355	3.15

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 nine months period ended 30 September 2023

Condensed consolidated and separate statement of profit or loss

			Group			Company
		9 months	9 months	3 months	3 months	9 months	9 months	3 months	3 months
		ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30
		September	September	September	September	September	September	September	September
In millions of Nigerian Naira	Notes	2023	2022	2023	2022	2023	2022	2023	2022
Revenue	6	1,772,949	1,456,135	614,210	506,048	1,772,992	1,455,959	614,719	506,322
Direct network operating costs	10	(447,601)	(333,925)	(170,642)	(118,116)	(447,465)	(333,924)	(170,651)	(118,115)
Value added services costs		(17,318)	(16,674)	(6,282)	(5,590)	(17,318)	(16,674)	(6,282)	(5,590)
Costs of SIM starter packs, handsets and accessories		(20,135)	(15,312)	(7,152)	(5,466)	(20,135)	(15,312)	(7,152)	(5,466)
Interconnect costs		(116,168)	(106,720)	(39,205)	(35,588)	(116,168)	(106,720)	(39,205)	(35,588)
Roaming costs		(6,310)	(4,790)	(2,437)	(1,856)	(6,310)	(4,790)	(2,437)	(1,856)
Transmission costs		(7,949)	(5,691)	(3,108)	(1,885)	(7,949)	(5,691)	(3,108)	(1,885)
Discounts and commissions		(85,689)	(69,474)	(30,315)	(24,580)	(83,099)	(67,771)	(29,774)	(23,896)
Advertisements, sponsorships and sales promotions		(31,088)	(21,036)	(11,672)	(6,819)	(19,213)	(16,995)	(6,568)	(5,330)
Employee costs	9	(45,549)	(32,882)	(17,079)	(10,733)	(42,573)	(32,213)	(16,341)	(10,505)
Other operating expenses	11	(87,216)	(69,066)	(32,840)	(24,165)	(95,708)	(60,696)	(32,545)	(18,365)
Depreciation of property and equipment	13	(156,753)	(128,992)	(58,343)	(46,078)	(156,753)	(128,992)	(58,343)	(46,078)
Depreciation of right of use assets	14	(86,991)	(75,858)	(29,147)	(26,043)	(86,991)	(75,858)	(29,147)	(26,043)
Amortisation of intangible assets	15	(55,756)	(38,036)	(19,135)	(13,759)	(51,767)	(34,048)	(17,805)	(12,430)
Operating profit		608,426	537,679	186,853	185,370	621,543	556,275	195,361	195,175
Finance income	7	21,121	8,214	4,728	1,149	20,278	7,920	4,609	964
Finance costs	8	(397,078)	(145,220)	(159,500)	(54,477)	(397,078)	(145,220)	(159,500)	(54,477)
Profit before taxation		232,469	400,673	32,081	132,042	244,743	418,975	40,470	141,662
Taxation	12	(85,105)	(131,634)	(13,401)	(44,628)	(88,762)	(137,124)	(15,933)	(47,646)
Profit for the period		147,364	269,039	18,680	87,414	155,981	281,851	24,537	94,016
Profit attributable to:
Owners of the company		148,091	270,339	19,502	88,403	155,981	281,851	24,537	94,016
Non-controlling interest		(727)	(1,300)	(822)	(989)	-	-	-	-
		147,364	269,039	18,680	87,414	155,981	281,851	24,537	94,016
Earnings per share
Basic/diluted to the owners of the parent (N)*	36	7.06	12.89	0.93	4.22	7.44	13.44	1.17	4.48

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

3

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

Condensed consolidated and separate statement of other comprehensive income

			Group			Company
		9 months	9 months	3 months	3 months	9 months	9 months	3 months	3 months
		ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30	ended 30
		September	September	September	September	September	September	September	September
In millions of Nigerian Naira	2023	2022	2023	2022	2023	2022	2023	2022
Profit for the period	147,364	269,039	18,680	87,414	155,981	281,851	24,537	94,016
Items that may be reclassified to profit or loss
Fair valuation loss on investments designated at FVOCI*	(1,264)	(120)	(85)	(9)	(1,264)	(120)	(85)	(9)
Other comprehensive loss for the period net of taxation	(1,264)	(120)	(85)	(9)	(1,264)	(120)	(85)	(9)
Total comprehensive income for the period	146,100	268,919	18,595	87,405	154,717	281,731	24,452	94,007
Attributable to:
Owners of the company	146,827	270,219	19,417	88,394	154,717	281,731	24,452	94,007
Non-controlling interest	(727)	(1,300)	(822)	(989)	-	-	-	-
	146,100	268,919	18,595	87,405	154,717	281,731	24,452	94,007

*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.

4

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

Condensed consolidated and separate statement of financial position

			Group	Company
In millions of Nigerian Naira	Notes		30 Sept 2023 31 Dec 2022 30 Sept 2023 31 Dec 2022
Assets
Non-current assets
Property and equipment	13	1,046,406	928,357	1,046,406	928,357
Right-of-use assets	14	668,743	652,110	668,743	652,110
Intangible assets	15	449,075	335,599	432,149	314,684
Investments in subsidiaries	16	-	-	75,178	74,328
Deferred tax asset	26.2	13,501	11,018	-	-
Other investments	17	10,278	10,585	10,278	10,585
Other non current assets	18	28,265	17,287	28,265	17,287
		2,216,268	1,954,956	2,261,019	1,997,351
Current assets
Inventories	19	6,337	3,678	6,337	3,678
Trade and other receivables	20	212,659	191,496	238,841	212,232
Current investments	21	32,001	20,288	30,539	17,406
Restricted cash	23	386,808	196,082	381,145	194,622
Cash and cash equivalents	22	224,854	349,500	207,112	324,244
		862,659	761,044	863,974	752,182
Total assets		3,078,927	2,716,000	3,124,993	2,749,533
Equity and liabilities
Equity
Share capital	35.1	420	407	420	407
Share premium	35.2	166,362	17,216	166,362	17,216
Treasury shares	35.3	(4,869)	(4,869)	(4,869)	(4,869)
Other reserves	35.4	400	1,664	400	1,664
Retained profit		147,054	319,819	205,789	370,664
Equity attributable to owners of the company		309,367	334,237	368,102	385,082
Non-controlling interest		718	1,445	-	-
		310,085	335,682	368,102	385,082
Liabilities
Non-current liabilities
Borrowings	28	473,695	439,463	473,695	439,463
Lease liabilities	31	666,637	662,655	666,637	662,655
Deferred tax liability	26.1	37,490	93,596	35,943	90,851
Provisions	29	44	43	44	43
Employee benefits	30	6,648	6,835	6,648	6,835
Other non-current liabilities	34	9,504	8,569	9,504	8,569
		1,194,018	1,211,161	1,192,471	1,208,416
Current liabilities
Trade and other payables	24	654,367	514,892	651,093	514,206
Current tax payable	27	159,152	199,959	158,856	199,687
Borrowings	28	549,074	250,210	549,074	250,210
Lease liabilities	31	47,021	64,829	47,021	64,829
Contract liabilities	25	99,274	92,861	98,892	92,479
Provisions	29	47,001	42,087	46,008	31,562
Deposit held for MoMo customers	32	5,459	1,257	-	-
Derivatives	33	13,476	3,062	13,476	3,062
		1,574,824	1,169,157	1,564,420	1,156,035
Total liabilities		2,768,842	2,380,318	2,756,891	2,364,451
Total equity and liabilities		3,078,927	2,716,000	3,124,993	2,749,533

The unaudited condensed consolidated and separate financial statements were approved by the Board of Directors on the 26 October

2023 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.

5

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

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 2022 Profit for the period Purchase of treasury shares Other comprehensive loss Acquisition of a subsidiary Dividends

Balance at 30 September 2022

Balance at 1 January 2023 Additional share issued Profit for the period Other comprehensive loss Dividends

Balance at 30 September 2023

Company

Balance at 1 January 2022 Profit for the period Purchase of treasury shares Other comprehensive loss Dividends

Balance at 30 September 2022

Balance at 1 January 2023 Additional share issued Profit for the period Other comprehensive loss Dividends

Balance at 30 September 2023

407	17,216	17,623	-	885	246,473	264,981	-	264,981
-	-	-	-	-	270,339	270,339	(1,300)	269,039
-	-	-	(4,869)	-	-	(4,869)	-	(4,869)
-	-	-	-	(120)	-	(120)	-	(120)
-	-	-	-	-	-	-	2,720	2,720
-	-	-	-	-	(288,280)	(288,280)	-	(288,280)
407	17,216	17,623	(4,869)	765	228,532	242,051	1,420	243,471
407	17,216	17,623	(4,869)	1,664	319,819	334,237	1,445	335,682
13	149,146	149,159	-	-	-	149,159	-	149,159
-	-	-	-	-	148,091	148,091	(727)	147,364
-	-	-	-	(1,264)	-	(1,264)	-	(1,264)
-	-	-	-	-	(320,856)	(320,856)	-	(320,856)
420	166,362	166,782	(4,869)	400	147,054	309,367	718	310,085
407	17,216	17,623	-	885	278,489	296,997	-	296,997
-	-	-	-	-	281,851	281,851	-	281,851
-	-	-	(4,869)	-	-	(4,869)	-	(4,869)
-	-	-	-	(111)	-	(111)	-	(111)
-	-	-	-	-	(288,280)	(288,280)	-	(288,280)
407	17,216	17,623	(4,869)	774	272,060	285,588	-	285,588
407	17,216	17,623	(4,869)	1,664	370,664	385,082	-	385,082
13	149,146	149,159	-	-	-	149,159	-	149,159
-	-	-	-	-	155,981	155,981	-	155,981
-	-	-	-	(1,264)	-	(1,264)	-	(1,264)
-	-	-	-	-	(320,856)	(320,856)	-	(320,856)
420	166,362	166,782	(4,869)	400	205,789	368,102	-	368,102

6

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

Condensed consolidated and separate statement of cash flows

In millions of Nigerian Naira	Notes
Cash flows from operating activities

Group	Company
9 months	9 months	9 months	9 months
ended 30	ended 30	ended 30	ended 30
September	September	September	September
2023	2022	2023	2022

Cash generated from operations	37
Interest paid	8
Interest received	7
Dividends paid
Tax paid
Employee benefits payments
Share based payments
Provisions payments
Net cash generated from operating activities
Cash flows from investing activities

991,471 777,855

(134,324) (132,979)

19,770 7,960

(171,697) (288,280)

(184,507) (139,511)

(1,468) (1,291)

(6,221) (5,843)

(12,214) (8,397)

500,810 209,514

1,000,674 785,490

(134,324) (132,979)

18,929 7,666

(171,697) (288,280)

(184,507) (139,511)

(1,468) (1,291)

(6,221) (5,843)

(12,214) (8,397)

509,172 216,855

Acquisition of property and equipment

Acquisition of intangible assets

Acquisition of right of use assets

Proceeds from disposal of property and equipment

Sale of investment in non-current FGN bonds

Purchase of bonds, treasury bills and foreign deposits

Sale of bonds, treasury bills and foreign deposits

Purchase of contract acquisition costs

Non-current prepayments

Investment in subsidiary

Increase in restricted cash

Net cash flows used in investing activities

Cash flows from financing activities

(242,919) (261,784)

(154,430) (123,757)

(19,228) (15,236)

1. 3,951

1. 384

(33,025) (11,515)

22,662 46,844

(3,301) (3,587)

(11,769)-

--

(186,524) (52,625)

(627,367) (417,325)

(242,919) (261,784)

(154,430) (123,757)

(19,228) (15,236)

1. 3,951

1. 384

(33,025) (11,515)

22,662 54,174

(3,301) (3,587)

(11,769)-

1. (10,880)
   (186,522) (50,677)

(628,215) (418,927)

Proceeds from borrowings
Repayment of borrowings
Repayment on lease liabilities
Investment by non-controlling interest
Net cash flow (used in)/generated from financing activities
Net decrease in cash and cash equivalents
Cash at the beginning of the period
Exchange gain on cash and cash equivalents
Cash and cash equivalents at the end of the period	22

365,500 307,359

(263,693) (179,177)

(133,753) (71,284)

• 2,720

(31,946) 59,618

(158,503) (148,193)

349,788 261,494

33,578 13,445

224,863 126,746

365,500 307,359

(263,693) (179,177)

(133,753) (71,284)

--

(31,946) 56,898

(150,989) (145,174)

324,532 247,628

33,578 13,445

207,121 115,899

7

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

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 nine months period ended 30 September 2023 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 2022 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 2022.

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 2023, 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 2023, but do not have an impact on the interim condensed consolidated and separate financial statements of the Group.

1. IFRS 17 Insurance Contracts - Effective for annual periods beginning on or after 1 January 2023.
2. Amendments to IAS 8 Accounting Policies and Accounting Estimates: Definition of accounting estimates - Effective date for annual periods beginning on or after 1 January 2023.
3. Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 - Effective date for annual periods beginning on or after 1 January 2023.
4. Amendments to IAS 12 Income Tax - International Tax Reform-Pillar Two Model Rules. - Effective date for annual periods beginning on or after 1 January 2023.
5. IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures - Effective for annual periods beginning on or after 1 January 2024, however, MTN Nigeria has elected for an early adoption of these standards for the year ending 31 December 2023.

These amendments had no impact on the interim condensed consolidated financial statements of the Group as there were no modifications during the period.

8

MTN Nigeria Communications Plc

Unaudited condensed consolidated and separate financial statements for the nine months period ended 30 September 2023

Notes to the unaudited condensed consolidated and separate financial statements

4. New standards and interpretations (continued) 4.2 Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's interim condensed consolidated and separate financial statements. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. The list of the new standards are set out below:

1. Amendments to IAS 1: Non-current Liabilities with Covenants - Effective date for annual periods beginning on or after 1 January 2024
2. Amendments to IFRS 16: Lease Liability in a Sale and Leaseback - Effective date for annual periods beginning on or after 1 January 2024
3. Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements - Effective date for annual periods beginning on or after 1 January 2024.
4. Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates -Effective date for annual periods beginning on or after 1 January 2025. Earlier application is permitted.

9