MTN Nigeria’s financial performance in the first quarter of 2025 showcased a remarkable turnaround, transitioning from a substantial loss in the same period of the previous year to a significant profit. The company reported a profit after tax of N133.7 billion, a stark contrast to the N392.7 billion loss recorded in Q1 2024. This positive shift was primarily attributed to a surge in operating profit and a dramatic reduction in foreign exchange losses. Despite a challenging economic environment marked by naira depreciation and rising operating expenses, MTN Nigeria implemented strategic measures that contributed to this financial recovery.
The devaluation of the naira against the US dollar, reaching N1,546.1/$ in Q1 2025 from N897.8/$ in Q1 2024, significantly impacted operating expenses, particularly lease-related costs, which constituted over 60% of the total. However, MTN proactively renegotiated lease terms, mitigating the impact of currency fluctuations and inflation-linked escalations. Additionally, VAT exemptions on energy components, introduced under the new Finance Act, further bolstered margin improvement. These cost-optimization strategies, combined with robust revenue growth, played a pivotal role in driving profitability.
The company’s operational performance also witnessed significant improvements. Earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 65.9%, with the EBITDA margin expanding by 7.2 percentage points to 46.6%. This growth was fueled by the aforementioned lease renegotiations, VAT exemptions, and ongoing cost-efficiency initiatives. While depreciation and amortization costs increased due to new lease additions, and net finance costs rose due to higher interest rates and lease liabilities, the substantial decline in foreign exchange losses, attributed to relative naira stability during the quarter, significantly contributed to the overall positive financial outcome.
MTN Nigeria’s strategic focus on data services continued to yield positive results. Data revenue experienced a remarkable 51.5% growth, driven by an expanding active user base and increased data consumption. Data traffic surged by 46.4%, with average usage per subscriber rising by 29.5% to 12.8GB. The increasing penetration of smartphones, reaching 60.7% with an addition of four million new smartphones during the quarter, further fueled the demand for high-speed data services.
Further contributing to the company’s success was the phased implementation of a new tariff structure, initiated in mid-February 2025, with the majority of changes impacting data and voice bundles taking effect in March. While the full impact of this new tariff structure on usage and revenue was anticipated to be realized from Q2 2025 onwards, early indications pointed towards strong customer demand resilience, supported by targeted customer value management (CVM) initiatives.
Looking ahead, MTN Nigeria expressed optimism about its growth trajectory and the opportunities within the Nigerian market. Despite acknowledging potential risks stemming from escalating global geopolitical and trade tensions, the company’s leadership expressed confidence in its ability to navigate the complex and evolving macroeconomic environment. The improvements in Nigeria’s macroeconomic conditions, including increased forex liquidity, relative naira stability, and easing inflation, provided a positive backdrop for future growth. However, the company remained vigilant about potential external challenges. The company’s focus on strategic initiatives, cost optimization, and data-driven growth positions it well for continued success in the Nigerian telecommunications market.
