After two years of navigating some of the most turbulent macroeconomic headwinds in its operating history, MTN Nigeria appears to be stabilizing and more importantly, profitable again.
Between 2022 and 2024, the telecoms giant reported combined losses of N728 billion, largely due to foreign exchange-related losses estimated at over N2 trillion.
The unification of Nigeria’s exchange rates triggered a sharp devaluation of the naira, significantly impacting the balance sheets of multinationals like MTN.
With no profits to declare and no dividends in sight, the company’s share price came under pressure.
That narrative is now beginning to shift.
In its Q1 2025 earnings report, MTN Nigeria posted a profit after tax of N133.7 billion, following a pre-tax profit of N202.6 billion in the second consecutive quarter of profitability after recording N163.3 billion in pre-tax profit in Q4 2024.
What’s driving the recovery?
The most notable factor is revenue growth. MTN reported over N1 trillion in revenue in the first quarter of 2025, the highest in any quarter in its operating history.
Voice and data revenues were the major drivers, growing 32% and 51% year-on-year, respectively.
According to CEO Karl Toriola, this growth was “supported by the late-quarter tariff adjustments” implemented in mid-February, with the bulk of the impact expected to be felt from Q2 onwards.
Beyond topline growth, MTN is also improving efficiency. Gross margin for the quarter came in at 59%, up from the 2024 average of 53%, indicating the business is not just growing but doing so while containing cost pressures.
While this is still below its historical margins of over 70%, it marks a step in the right direction.
The company also implemented a revised lease agreement with IHS Towers, a move that helped reduce exposure to dollar-denominated liabilities and cap price escalations.
Combined with broader cost optimisation initiatives, these changes drove a 66% increase in EBITDA and expanded EBITDA margin to 46.6%.
Perhaps most crucially, MTN has sharply curtailed its foreign exchange losses. From a staggering N695 billion in Q1 2024, FX-related losses dropped to just N5.5 billion in the latest quarter.
The company attributes this to both internal risk management measures and relative stability in the exchange rate during Q1 2025.
What about dividends? Despite the turnaround in profitability, the company still has 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 in the immediate term, as Nigerian regulations do not permit dividend payouts from retained losses.
However, if the current earnings trajectory continues, MTN could potentially clear these losses before the end of 2025.
Capital raise on the cards?
There are market speculations that MTN may consider raising capital to strengthen its balance sheet. Historically, the company has operated with relatively low shareholder equity, relying instead on its strong cash flows and solid business fundamentals to access financing.
With its return on assets and EBITDA margins both trending positively, there’s a credible case for strategic capital raising, especially if aimed at reducing net liabilities or funding future expansion.
According to the company, this turnaround reflects the execution of its five strategic priorities outlined at its Extraordinary General Meeting in April 2024.
It also reported positive free cash flow of N209.9 billion for the quarter, though this was down 54.8% from the prior year due to accelerated capital expenditure and a high base effect from last year’s FX-related adjustments.
The outlook
While challenges remain, MTN Nigeria’s path to profitability is becoming clearer. With tariffs recalibrated, forex losses under control, and margins improving, the company appears to be on a more sustainable footing.
But whether it’s time to buy the stock or stay on the sidelines remains a strategic question. For that, check out our exclusive FTM blog where Ugodre shares his in-depth take on whether MTN is a Buy, Sell, or Hold.
