MTN Nigeria reports a significant financial rebound with surge in subscribers

MTN Nigeria Communications has reported a substantial increase in its subscriber base and an financial turnaround for the quarter ending March 31.

The mobile network operator and biggest subsidiary of JSE-listed MTN Group added 3.2 million new subscribers, boosting its total subscriber count by 8.2% to reach 84.1 million in a period marked by economic challenges.

Once jeopardised by macroeconomic policy shifts that led to the naira's substantial depreciation, MTN Nigeria’s latest results reveal a robust recovery. In a stark contrast to a taxed loss of N392.7 billion during the same period last year, the company announced a profit of N133.7bn, reflecting an ability to adapt and thrive amidst economic turbulence.

“We reported a significant turnaround in our bottom line. This reflects the successful delivery of the five strategic priorities we committed to at the Extraordinary General Meeting on April 30, 2024,” said CEO Karl Toriola.

This resulted in an improvement of retained earnings from negative N607.5bn to negative N474.1bn, while shareholders’ equity also saw a positive shift, moving from negative N458bn to negative N324.6bn.

The financial outlook appears promising, with an anticipated recovery in free cash flow (FCF) following the impact of a recent tariff increase. During the first quarter, MTN Nigeria noted a 40.5% surge in service revenue, totalling N1 trillion, while earnings before interest, tax, depreciation, and amortisation (EBITDA) surged by 65.9% to N492.7bn. Active data users also saw a healthy rise of 13%, reaching 50.3 million.

The positive momentum was not unnoticed in the market; MTN Group’s share price rose by 3.04% on the JSE on Wednesday, contributing to an annual gain of 32.8%.

“Building on the momentum from the fourth quarter, our first-quarter results place us 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.

During the quarter, the regulatory approval for price adjustments facilitated an acceleration of network investments aimed at enhancing capacity and user experience.

While macroeconomic uncertainties persisted, Toriola said that a relatively stable naira and easing inflation rates following the rebasing of Ghana's Consumer Price Index were positive factors towards the outlook for the rest of the financial year..

During the quarter, a significant milestone was achieved through a collaborative agreement reached between MTN Group and Airtel Africa focused on passive infrastructure sharing, enhancing network coverage and driving cost efficiencies.

In line with its fintech strategy, MTN was recalibrating its focus, resulting in a 25.7% decline in the active wallet base to 2.1 million compared to December 2024. However, this move is intended to onboard more high-value customers and improve liquidity in the long run.

Toriola reiterated their commitment to financial inclusion, announcing the launch of a rural penetration strategy aimed at expanding access to financial services for underserved communities.

MTN Nigeria effectively managed cost pressures through the three months through a revised tower lease agreement, thereby reducing foreign exchange exposure and limiting price increases.

Toriola concluded: “We expect a progressive recovery in free cash flow as the full impact of the tariff increase is realised.”

Business Report