MTN Nigeria Posts Record N1.09tn Pre-Tax Profit as Data Boom, Lower Debt And Stronger...

MTN Nigeria Communications Plc delivered its strongest half-year financial performance on record, posting a profit before tax of N1.09 trillion for the six months ended June 30, 2026, as surging demand for data services, improved operating efficiency, lower finance costs and sustained subscriber growth powered earnings.

The telecommunications giant reported a 75.4% year-on-year increase in profit before tax, while revenue climbed 25.9% to N2.99 trillion, underscoring the resilience of Nigeria's digital economy even as businesses continue to navigate inflationary pressures and elevated operating costs.

The record performance also translated into stronger shareholder returns, with the Board of Directors approving an interim dividend of N26 per share, payable on Sept. 7, 2026, to shareholders on the register as of Aug. 20.

The unaudited results, released through the Nigerian Exchange (NGX) on Thursday, show that MTN's earnings growth was supported by robust commercial execution, accelerating data consumption and a more stable naira, which helped moderate foreign exchange-related cost pressures that had weighed heavily on profitability in previous periods.

Profit after tax rose 70.6% to N707.5 billion, while earnings per share increased by the same margin to N33.76. Operating profit expanded 41.9% to N1.27 trillion, reflecting widening margins as revenue growth significantly outpaced operating expenses.

The company's financial position also strengthened considerably during the period. Shareholders' equity rose 69.6% to N930.6 billion, lifting net assets per share to N44.41, while total assets increased 10.5% to N5.97 trillion.

Data Business Becomes MTN's Dominant Growth Engine

The results further demonstrate MTN Nigeria's transformation from a traditional voice operator into a data-centric digital infrastructure company.

Data revenue remained the primary driver of growth, rising 38.3% year-on-year to N1.70 trillion. The segment accounted for approximately 56.8% of total revenue and contributed nearly 77% of the overall increase in revenue during the period.

The performance was buoyed by growing demand for mobile broadband, video streaming, cloud services, social media, fintech applications and AI-powered digital services, all of which continue to increase data consumption across Nigeria.

Voice revenue, while still a significant contributor, grew at a more modest pace of 15.0% to N897.1 billion and accounted for about 30% of total revenue.

Combined, data and voice services generated N2.60 trillion, representing almost 87% of total revenue, illustrating how data has firmly overtaken traditional telecommunications services as MTN's principal source of earnings.

Other business segments also recorded solid growth. SMS revenue increased 21.9% to N112.7 billion, digital services revenue rose 21.1% to N58.7 billion, handset and accessories sales climbed 29.3% to N11.0 billion, while ICT-related revenue grew 8.6% to N23.9 billion.

However, interconnect and roaming revenue declined 1.9% to N112.2 billion, while value-added services fell 6.9% to N77.1 billion, reflecting softer demand in some supplementary digital offerings.

Profitability Boosted By Lower Financing Costs

Beyond strong revenue growth, MTN benefited from improved cost management and a significantly lighter debt burden. Interest-bearing borrowings declined 35.1% to N342.6 billion, reducing finance costs and providing a substantial boost to earnings before tax.

The improved profitability also indicates a more stable foreign exchange environment after the severe currency volatility experienced in recent years, which had sharply increased the cost of servicing foreign currency obligations and importing network equipment.

Despite continued inflationary pressures and elevated energy costs associated with powering thousands of telecommunications sites nationwide, MTN expanded its EBITDA margin by 5.3 percentage points to 55.9%, highlighting improvements in operating efficiency.

Subscriber Growth Supports Long-Term Outlook

Chief Executive Officer Karl Toriola said the company maintained strong commercial momentum throughout the first half of the year despite Nigeria's challenging macroeconomic environment.

"We delivered a strong first-half performance, with sustained commercial momentum, improved profitability and robust cash generation. This reflects the resilience of demand for our services, disciplined execution across the business and continued focus on efficiency in a challenging operating environment," Toriola said.

He noted that improved stability of the naira helped moderate cost pressures, while MTN added 4.9 million subscribers during the period, bringing its total customer base to 92.2 million.

Active data subscribers increased to 55.7 million, reinforcing the company's leadership in Nigeria's rapidly expanding mobile internet market.

According to Toriola, service revenue growth of 25.9% exceeded MTN's medium-term guidance, while continued investment in network expansion supported improvements in customer experience and capacity.

The company invested N620.5 billion in capital expenditure, excluding leases, during the period as it continued expanding 4G and 5G coverage, upgrading network infrastructure and increasing capacity to accommodate rapidly rising data traffic.

Free cash flow rose 73.9% to N712.7 billion, providing the financial flexibility to support higher shareholder distributions through the interim dividend.

Balance Sheet Reflects Stronger Financial Position

MTN's balance sheet continued to improve as profitability translated into higher retained earnings and stronger shareholder equity.

Retained earnings nearly doubled to N793.1 billion, becoming the principal driver of the increase in shareholders' funds.

Current investments also rose sharply to N415.3 billion from N162.3 billion at the end of December 2025, strengthening the company's liquidity position.

Trade receivables declined to N369.5 billion, suggesting improved collections from customers.

Cash and cash equivalents, however, fell to N458.9 billion from N632.5 billion six months earlier, reflecting substantial cash deployment toward capital expenditure, tax obligations, financing commitments and shareholder returns.

Property, plant and equipment increased to N2.22 trillion, while right-of-use assets stood at N1.75 trillion.

Together, these assets accounted for roughly two-thirds of MTN's total asset base, highlighting the capital-intensive nature of operating Africa's largest telecommunications network.

While conventional borrowings declined significantly, lease liabilities remained elevated at N2.44 trillion, continuing to represent the company's largest long-term financial obligation due to extensive tower lease arrangements.

Current tax liabilities increased to N640.4 billion, reflecting the company's substantially stronger profitability.

Investors Eye Further Upside

MTN Nigeria's shares closed unchanged at N857.10 on Thursday following the earnings release, suggesting investors had yet to fully price in the stronger-than-expected results.

The stock has delivered one of the strongest performances among Nigeria's blue-chip companies this year, rising 67.7% from N511.00 at the beginning of 2026.

Over the past month alone, the shares have gained approximately 19%, climbing from around N720 in early July and significantly increasing the company's market capitalization.

The combination of record earnings, expanding profit margins, strong subscriber additions, improving cash generation and a higher interim dividend is likely to reinforce investor confidence, particularly as MTN continues to benefit from structural growth in Nigeria's digital economy.

Overall, MTN Nigeria's performance highlights the accelerating shift in the country's telecommunications industry toward data-driven revenue, with mobile broadband now serving as the primary engine of growth. Rising smartphone penetration, greater adoption of digital financial services, cloud computing, video streaming and AI-enabled applications continue to fuel demand for high-speed connectivity.

The results also suggest that the operating environment is becoming more supportive for large corporates after years of severe foreign exchange volatility and elevated financing costs. Lower borrowings, stronger cash generation and continued investment in network infrastructure position MTN to sustain earnings growth while strengthening shareholder returns.

With a subscriber base exceeding 92 million, record profitability and one of the strongest balance sheets in Nigeria's telecommunications sector, MTN remains well positioned to capitalize on the country's expanding digital economy and growing demand for connectivity.