After grappling with two years of record-breaking losses and foreign exchange shocks, MTN Nigeria is back in the black—posting a profit after tax of N133.7 billion in Q1 2025.
This marks the second straight quarter of profitability for the telecoms giant, which also recorded N163.3 billion in pre-tax profit in Q4 2024.
From 2022 to 2024, MTN Nigeria had reported cumulative losses of N728 billion, driven primarily by massive foreign exchange losses of over N2 trillion following Nigeria’s currency devaluation.
The unification of the country’s exchange rates significantly impacted multinationals like MTN, wiping out profits and forcing the suspension of dividend payouts—causing investor sentiment to falter.
That trend is beginning to reverse.
In its latest quarterly report, MTN declared a pre-tax profit of N202.6 billion, supported by its highest-ever quarterly revenue of over N1 trillion.
The company’s turnaround was fuelled by strong growth in voice and data services, which rose by 32% and 51% year-on-year, respectively.
CEO Karl Toriola credited this revenue surge to recent price increases, stating it was “supported by the late-quarter tariff adjustments” rolled out in mid-February, with more impact expected in subsequent quarters.
Beyond topline growth, the company’s cost discipline is improving.
MTN’s gross margin climbed to 59% from an average of 53% in 2024, showing that the company is expanding while managing cost pressures.
Though still below the historical 70% margin levels, it’s a positive sign of renewed efficiency.
A key driver of this performance was the company’s renegotiated lease agreement with IHS Towers, which reduced MTN’s exposure to dollar-denominated liabilities and helped cap cost escalations.
Together with other cost-saving measures, these efforts led to a 66% increase in EBITDA and pushed EBITDA margin to 46.6%.
Perhaps most significantly, MTN managed to cut its foreign exchange losses to just N5.5 billion, down sharply from N695 billion in Q1 2024.
The company attributes this dramatic improvement to internal risk controls and more stable exchange rate conditions during the quarter.
Despite the strong earnings, MTN still carries an accumulated loss of N474.1 billion, down from N607.5 billion at the end of 2024.
This means dividend payments remain off the table for now, as Nigerian law prohibits paying dividends while carrying retained losses.
However, if MTN’s current performance continues, the company could potentially clear its deficit before the end of 2025.
There is also speculation that MTN may be considering a capital raise to boost its balance sheet.
Known for operating with lean shareholder equity and relying on its strong cash flows, the company may now seek to raise funds to reduce liabilities or support future expansion.
MTN says the turnaround reflects steady execution of its five strategic priorities set during its Extraordinary General Meeting in April 2024.
While free cash flow stood at N209.9 billion for the quarter, it was down 54.8% from last year, reflecting an increase in capital spending and a high base effect from FX-related gains in 2024.
MTN Nigeria may not be out of the woods yet, but with growing revenue, improved margins, and a sharp drop in FX losses, it’s clearly on a firmer path.
Whether that makes the stock a Buy or Hold is a decision investors will have to weigh carefully.
