…capital spending jumps 159%
Investors who held on to the shares of MTN Nigeria Communications Plc are smiling today as the telecommunications firm posted a profit after tax (PAT) of N133.68 billion in March 2025, from a loss of N392.69 billion as at March 2024.
This was primarily driven by robust revenue growth after the implementation of the tariff increases, alongside lower FX loss print within the period.
It is not extravagant to say that shareholders will be rewarded from distributable profit as MTN Nigeria sits on a positive free cash flow of N209.90 billion, which underscores earnings growth.
MTN ramped up investment in the first quarter of 2025, pointing to stronger-than-expected resilience in corporate confidence as the firm returns to the path of profitability.
Capital expenditure (Capex), excluding leases, surged by 159.12 percent to N202.4 billion as at March 2025, as the telco giant focused on building capacity and user experience.
MTN Nigeria made money from its core operations as earnings before interest and taxation, depreciation, and amortisation (EBITDA) spiked by 65.90 percent to N492.70 billion as at March 2025.
EBITDA margin expanded by 7.20 percentage point (pp) to 46.60 percent as at March 2025. Revenue spiked by 39.62 percent to N1.05 trillion in the period under review from N758.12 billion the previous year.
The company’s impressive revenue growth in the review period stemmed largely from upticks in the data (+51.5% YoY) and voice (+32.0% YoY) revenue segments.
The former, data, which now accounts for 50.0% of total revenue, reported improvements in both data consumption (+29.5% YoY to 12.8GB) and user base (+13.0% YoY) due to enhanced service quality and price adjustments.
Meanwhile, the strong voice revenue performance profited from MTNN’s focused strategy on subscriber acquisition, retention, usage and price increases.
A stellar performance strengthened investors’ confidence in the company’s ability to deliver higher returns in the form of bumper dividend and share appreciation needed to magnify their earnings as the telco giant has surmounted the foreign exchange revaluation headwinds.
The company reported a net FX loss of N5.5 billion, down by 99.2% year-on-year, stemming from the overall relative stability observed in the FX market.
Even amid an unpredictable macroeconomic environment, the company is sanguine by the relative stability of the naira during the period and the moderation in inflation following the rebasing of the Consumer Price Index (CPI) in January 2025.
The exchange rate remained relatively stable at N1,537/US$ at the end of March 2025, while reported inflation was 24.2%.
The stability in the local currency Naira means the bold reforms of president Bola Tinubu such as the unification of the foreign exchange market and the removal of subsidies on fuel.
“We are pleased with our performance in the first quarter of 2025, which reflects the continued execution of our strategic priorities and the resilience of demand for our services,’’ said Karl Toriola, CEO OF MTN Nigeria
“Building on the momentum from Q4 2024, our Q1 results place us firmly on the path to restoring profitability and achieving a positive net asset position within the current financial year, while increasing our investments to improve network and service quality,” said Toriola.
MTN Nigeria total subscribers increased by 8.20 percent to 84.10 million as it added 3.20 million subscribers in the first quarter.
MTN Nigeria’s Profit Before Tax margin increased to 19.2% in contrast to -76.5% recorded in Q1’24, and Earnings Per Share (EPS) settled at N6.4 compared to -N18.6 in Q1’24.
MTN Nigeria shares are up 16.67% in the past year and traded at N245 per share today for a market capitalisation of N5.14 trillion.
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