MTN Nigeria profits surges ahead of Q1 results amid profitability hopes

• Published On: 28 April 2025 at 20:05

Investor interest in MTN Nigeria peaked in April, fueled by growing expectations that the country's largest telecom provider will return to profitability in the first quarter of 2025.

This fresh confidence comes after a 50% tariff hike, which experts believe will boost the company's margins and be reflected in subsequent earnings.

On April 15, MTN Nigeria had the biggest single-day trading volume ever on the Nigerian Exchange, with over 11 million shares changing hands. The corporation plans to reveal its Q1 2025 financial results on April 29, immediately before its annual public meeting. A return to profitability would be the telco's first positive quarter since the naira's severe devaluation in 2023.

MTN Nigeria, which controls more than half of Nigeria's telecom market, is vital to increasing digital access throughout the country. The company's share price jumped to ₦245 in April, indicating increased investor confidence in its turnaround approach. The telco recently relaunched its home broadband service as FibreX, aiming to increase its position in the high-demand residential internet sector.

"Investors are also anticipating the second public share offering announced by MTN Nigeria earlier this month," said Tajudeen Ibrahim, head of research at Chapel Hill Denham. "Despite recovering in Q4, the shares are still seen as undervalued."

MTN Group intends to cut its shareholding in MTN Nigeria from 76% to 65%, with the timing of the public offering contingent on the company's return to regular profitability and dividend payouts.

MTN Nigeria, valued at ₦5.1 trillion, is the fourth most capitalized firm on the Nigerian Exchange and one of the most actively traded companies during the week of April 24. Airtel Africa, MTN's primary competitor and the largest capitalised business, had no trade activity despite adopting a 50% pricing increase.

Between January 17 and April 17, Airtel Africa exchanged barely 336,734 shares in 331 transactions, compared to MTN's multi-million volume. Analysts blame this to Airtel Africa's poor market liquidity, which is exacerbated by its ongoing $100 million share repurchase program, reducing the amount of shares available for public trade.

"Unlike MTN, Airtel Africa is an illiquid stock," stated Benedict Egwuchukwu of Afrinvest. "The scarcity of shares makes it harder for investors to buy or sell without moving the price significantly."

Despite the increase in activity, MTN ranked 44th by trading volume on the NGX, considerably behind Fidelity Bank, which traded over 388 million shares in a single day. However, the increase represents a good move as the telecom behemoth attempts to reverse two years of severe losses.

MTN Nigeria experienced a 36% increase in revenue to ₦3.36 trillion in 2024, but still recorded a ₦400.44 billion loss after tax due to ₦925 billion in foreign exchange losses. The company's last quarter profit of ₦114.5 billion raised optimism for a long-term recovery.