MTN Nigeria Communications PLC, Nigeria's leading telecommunication services provider, recently released its Quarter 1 2026 financial statement for the period ended 31 March, 2026. Prior to that, they had released their 2025 Financial statement, which underscored a sterling recovery from previous years, and was highlighted by the payment of a final dividend of ₦15, in addition to the interim dividend of ₦5 paid in the course of the year in view.
MTN's performance took a major hit following the two major reforms of Nigeria's incumbent administration - fuel subsidy removal and floating of the Naira, resulting in huge losses, deterioration of the company's shareholders' fund, and zero dividend in 2024. Although the Telecommunications industry in Nigeria is heavily regulated, it remains an industry with a moat and high barrier to entry, largely dominated by the big three, MTN, Airtel, and Glo, with MTN as the undisputed market leader.
So when in early 2025 the Federal Government of Nigeria finally approved for the industry to take up tariffs by up to 50% to reflect the nation's new economic realities, MTNN's performance immediately took a positive turn. Within the first three quarters of 2025 were able to reverse the deteriorated shareholders fund and recommence dividend payment to shareholders.
Just as we highlighted in the Lafarge Africa PLC turnaround story we wrote about, one of the best times to invest in a company's shares is during a turnaround or recovery. But the question is, will you have the strength of mind to take such positions even with all the facts laid bare before you? MTNN's share price has risen from circa ₦170 during the prolonged market downtrend caused by massive foreign exchange losses and accumulated corporate losses, to about ₦820 after peaking at ₦915 few weeks ago.
And though in retrospect it looks like an easy investment decision any investor could have made, it is usually difficult to take such a position in the heat of the the moment when a stock is badly beaten by the market, even when the facts of a near to medium term recovery are staring you in the face. That is what distinguishes savvy investors like Warren Buffet from the rest.
2025 Performance: A Strong Rebound
MTN Nigeria posted a whooping ₦5.2 trillion in revenue in 2025, representing 58% growth versus the previous year, Operating profit of ₦2 trillion, 267% increase, and ₦1.1 trillion in Profit after tax, from a loss of -₦399 billion the previous year. The group's Earnings per share closed at ₦53.07 compared to -₦19.05 in the previous year. They paid out a total of ₦419.9 billion in total dividends for the year, translating to ₦20 total per share for 2025, and a payout ratio of circa 38%.
It is instructive to note that data contributed 53% to revenue for 2025, while Voice contributed 32%, compared to 2024 where data contributed 45% and voice 33%. Interestingly, MTNN made ₦203 billion from SMS in the same year, a decline from ₦226 billion previous year.
In Quarter 1 2026, MTN Nigeria posted revenue of ₦1.498 trillion, operating profit of ₦632 billion, and profit after tax of ₦355 billion, translating to Earnings per share of ₦16.95, all showing significant growth compared to the same period last year.
This time, Data revenue contribution increased to 55% as voice dropped to 30%, as MTN continues to double down on the data driven young market to extract value. It is also indicative of the rising cost of voice calls and the consumer shift to data calls and data-based communications through apps like Whatsapp, Telegram, etc.
Worthy of note is the new direction of the business, the proposed transaction to structurally separate the Fintech business, Momo Payment Service Bank and Y'ello Digital Financial Services Limited, from the core telecoms business, which was approved by shareholders at the last Annual General Meeting held on the 30th of April, 2026.
In the Explanatory note released by MTN Nigeria, it stated, "To date, MTN Nigeria has been solely (100%) responsible for all capital injections into the Fintech Companies. However, the Fintech Companies are still in an early-growth stage and remain loss-making, with significant funding required in the near-term to accelerate growth. In 2025, MTN Nigeria recorded revenue of ₦191 billion and an impairment of N62.56 billion in respect of its investments in the Fintech Companies".
Hence the proposed transaction is for MTN Group Fintech to acquire 60% stake in each of MTN Nigeria's Fintech companies, for an agreed valuation of ₦95.5 billion (on an intra-group debt free and cash free basis), resulting in an implied capital injection of ₦152.06 billion payable in cash or consideration other than cash, or a combination into the Fintech Companies, while MTN Nigeria will retain a 40% stake in the Fintech Companies. Essentially, the total amount that MTN Group Fintech would pay for its 60% stake in the Fintech Companies would be ₦152.06 billion.
Following this Structural Separation in Phase 1, the next phase will be Restructuring, where a new entity "Fintech HoldCo" will become the 100% owner of the shares in the Fintech Companies, having acquired all the shares held respectively by MTN Group Fintech and MTN Nigeria in the Fintech Companies (subject to regulatory approval).
The proposed transaction will allow MTN Nigeria to focus on its core operational activities, improve its Balance sheet and enhance profitability, share both financial and operational risks of the Fintech companies with the Group, among other benefits, while allowing for value accretion to the Fintech companies via external funding.
Valuation and Market Position
Going by Friday's closing price on the Nigerian Exchange Limited, MTNN share price closed at ₦820, placing its market capitalization at a little above ₦17.2 trillion, one of the top four most capitalized companies listed on the the exchange.
Annualizing the Q1 numbers, we have a company with projected revenue of ₦6 trillion (₦5.2 trillion ex-Fincos) and projected PAT of ₦1.4 trillion for 2026, trading at roughly 2.8 time revenue.
In addition, MTN Group, the parent company and major shareholders of MTN Nigeria, announced in February that it has entered into an agreement with IHS Holdings to fully acquire them via an all-cash transaction. While this is clearly value accretive to MTN Group, investors expect that it will also translate into efficiency and value for MTN Nigeria, given that IHS subsidiaries in Nigeria serve as key infrastructure partners to MTNN.
Risks on the Horizon
While the company has given assurances to minimize disruptions, two key risks confront margins going forward. Energy prices volatility driven by elevated geopolitical tensions in the Middle-east remains a concern, especially for a power intensive business like telecoms.
In addition, the suspension of MTNN's airtime and data credit advance service ("Xtratime") due to new regulatory compliance requirements , could have a short-term impact on usage and revenue.
The coming quarters will reveal how effectively the company can navigate these pressures while sustaining growth and delivering value to shareholders.
Overall, MTN Nigeria remains, no doubt, a solid company with strong investor sentiments and a powerful brand in Nigeria. And as long as they continue to deliver growth and long-term value to shareholders, they will likely remain a toast to both retail and institutional investors for the foreseeable future.
The deeper question, perhaps, is not just about the numbers, but about temperament. Markets will always present opportunities dressed in discomfort. The real test is whether one can act with clarity when conviction is required most.
What do you think? Is MTN Nigeria overvalued. undervalued or fairly valued at its current share price? Tell us in the comments.
At Cowryvest, our goal is to simplify investment analysis and help African investors make better financial decisions through data-driven insights.
If you are new to investing in the stock market and would like to know where to start, check out this article: How to Start Investing in the Nigerian Stock Market: A Guide for Beginners.
To see an updated list of dividends declared by Nigerian publicly listed companies in 2026, check out this article: List of Dividends Declared in 2026 by Nigerian Companies (NGX Update)
You may also check out other insightful articles here.
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