Agusto raises MTN Nigeria rating to Aaa, outlook stable, amid June selloff

Agusto & Co. has upgraded the long-term rating of MTN Nigeria Communications Plc to Aaa, the highest rating on its national scale, from Aa+, while reaffirming the company’s short-term rating at A1+.

The rating outlook was maintained as stable, according to a corporate disclosure filed by MTN Nigeria with the Nigerian Exchange Limited and the investing public on Wednesday, July 1, 2026.

The upgrade follows the recent affirmation of MTN Nigeria’s AAA(NG) long-term and A1+(NG) short-term ratings by Global Credit Rating Company, placing the telecoms operator at the highest rating level across both Agusto & Co. and GCR.

What they are saying

Agusto & Co. cited the company’s strong cash flow generation, strong liquidity position, low leverage profile, and leadership in Nigeria’s telecommunications market as key factors behind the upgrade.

The press release stated that the rating upgrade reflects a stronger-than-anticipated recovery in earnings and shareholders’ equity, supported by tariff repricing, increased data usage, and reduced foreign exchange pressure following the full repayment of its US dollar-denominated obligations.

MTN Nigeria said it is currently the only non-financial institution with an active Aaa rating from Agusto & Co.

Commenting on the rating action, MTN Nigeria’s Chief Executive Officer, Karl Toriola, said the upgrade reflects the company’s earnings recovery and disciplined balance sheet management.

• “We are pleased with the upgrade of our long-term rating to Aaa, the highest on Agusto’s national scale,” Toriola said.
• “This outcome reflects the strength of our earnings recovery, the quality of our cash flows and disciplined balance sheet management. Holding the highest ratings from both leading rating agencies underscores the resilience of our business and the strength of our financial position.
• “We remain focused on sustaining this momentum and delivering long-term value to our stakeholders.”

What you should know

The company, which launched operations in Nigeria in 2001, is part of MTN Group, a multinational telecommunications group operating in 16 countries across Africa and the Middle East and serving more than 300 million people.

• Beyond the rating announcement, MTN Nigeria’s recent financial statements provide useful context on why Agusto & Co. upgraded the company’s long-term rating.
• In FY 2025, net cash generated from operating activities increased by 154.6% to N2.21 trillion, from N868.90 billion in 2024.
• This represents a major recovery and supports Agusto’s position that MTN Nigeria’s earnings and cash generation strengthened significantly.

The momentum continued into Q1 2026, as net operating cash flow rose by 73.3% to N764.10 billion, compared with N441.04 billion in Q1 2025.

On leverage, both the cash flow and balance sheet data support the view that MTN Nigeria is reducing debt pressure.

• In 2025, the company repaid N523.09 billion in borrowings, while new borrowing proceeds fell to N107.36 billion, compared with N463.35 billion in 2024.
• In Q1 2026, MTN Nigeria recorded no new borrowing proceeds and repaid N154.04 billion in borrowings.
• The Q1 2026 balance sheet further reinforces the deleveraging trend.
• Borrowings declined by 24.9% to N314.97 billion as of March 31, 2026, from N419.57 billion as of December 31, 2025.
• Total borrowings, based on the company’s note disclosure, also fell by 28.4% to N377.70 billion, from N527.67 billion, while the current portion of borrowings declined to N62.74 billion, from N108.10 billion.
• At the same time, shareholders’ equity strengthened materially, rising by 64.7% to N903.94 billion, from N548.71 billion at the end of 2025. Retained profit also increased by 88.7% to N755.69 billion, from N400.40 billion.

This means MTN Nigeria reduced borrowings while strengthening its equity base, improving its leverage position.

That supports Agusto’s view that the company’s leverage profile has improved, although lease liabilities remain sizeable at N2.09 trillion, reflecting the capital-intensive nature of telecoms operations.

Market performance;

MTN Nigeria closed the first half of 2026 at N720 per share, down from a May peak of N820 and a 52-week high of N915, having surrendered nearly 20 percentage points of year-to-date return in June alone.

The stock shed N2.1 trillion in market capitalization in June, adding to N2.0 trillion lost in May, for a combined two-month correction of N4.09 trillion from peak.

At N15.1 trillion; 10.4% of the Nigerian Exchange MTNN remains the country’s third most valuable listed company.

The correction reflects a market-wide risk repricing in May and June, not a deterioration in MTN Nigeria’s operating fundamentals.

The NCC tariff adjustment, expanding data revenues, and dominant market position that justified the H1 rally remain structurally intact.