MTN Nigeria has released its unaudited Q1 2026 results, sustaining the recovery momentum that began in 2025 after two years of losses.
The telecom giant reported a pre-tax profit of N546.42 billion for the quarter, representing a 169.64% increase compared to N202.65 billion recorded in Q1 2025.
The performance marks MTN Nigeria’s second-best quarterly pre-tax profit since listing, coming just 4% below the N569.59 billion recorded in Q4 2025.
This follows a turnaround in 2025, when the telecom giant returned to profitability after losses in 2023 and 2024.
Before the crisis, MTN Nigeria posted a profit after tax of N349 billion in 2022. However, the sharp depreciation of the naira changed the company’s earnings story.
In 2023, MTN slipped into a loss after tax of N137 billion. By 2024, losses deepened further to N400 billion, dragging retained earnings to a negative N607 billion and shareholders’ funds to negative N458 billion.
The market reacted sharply at the time. MTN’s share price, which traded as high as N293 during 2024, eventually closed the year at N200.
But the company has staged a strong comeback. The stock has since rallied from N200 in 2024 to as high as N915 in April 2026 before pulling back to N801.10 as of May 8, 2026.
So, what really happened between the crisis years of 2023 and 2024, the recovery in 2025, and the sustained momentum now being seen in 2026?
MTN Nigeria’s management attributes much of the recovery to operational discipline.
Commenting on the Q1 2026 results, CEO Karl Toriola stated:
- “Despite a challenging cost environment, strong operational discipline kept operating expenses well contained, delivering meaningful operating leverage. EBITDA increased by 68.1%, and EBITDA margin expanded by 8.7 percentage points to 55.3%, in line with our medium-term guidance of a mid-to-high 50% margin range. As a result, PBT rose by 169.6% to N546.4 billion.”
However, a deeper look into the company’s financials shows that one of the most surprising parts of MTN Nigeria’s recovery story is that the company never really suffered from weak demand, even during the loss-making years.
- While FX losses and rising costs pressured earnings, Nigerians continued spending heavily on calls, internet access, streaming, mobile banking, and other digital services.
This steady demand helped MTN grow revenue consistently over the last three years, rising from N2.01 trillion in 2022 to N2.47 trillion in 2023, before surging to N5.20 trillion in 2025.
The momentum has continued into 2026, with Q1 revenue climbing 41.6% year-on-year to N1.49 trillion.
- If annualized, MTN Nigeria could be on track to generate close to N6 trillion in revenue in 2026.
The acceleration reflects a combination of stronger data consumption, tariff adjustments implemented in early 2025, subscriber growth, and expanding digital services adoption.
- Data revenue surged by 74.5% to N2.78 trillion in 2025, contributing more than 53% of total revenue, while data subscribers rose by 11.6% to 53.2 million users.
- Mobile subscribers also increased by 7.9% to 87.3 million, while fintech revenue jumped 79.7% to N191.27 billion as MoMo wallets expanded by 30.8% to 3.7 million users.
In simple terms, consumers have continued prioritising connectivity, helping MTN maintain strong commercial momentum.
If demand remained strong, what then caused the collapse in profit? The answer was foreign exchange losses.
Despite resilient revenue and operating performance, MTN Nigeria’s earnings were heavily damaged by the sharp depreciation of the naira.
- The company recorded FX losses of N740.43 billion in 2023, which worsened to N925.36 billion in 2024 as the devaluation of the naira significantly increased the revaluation impact of foreign currency obligations and lease liabilities.
The impact was severe enough to wipe out operating profits and push the telecom giant into losses despite growing demand for data and digital services.
However, the story changed in 2025, as FX pressure eased and the naira stabilized relative to previous periods.
- MTN Nigeria recorded a net FX gain of N90.27 billion in 2025, followed by another N33.3 billion FX gain in Q1 2026.
This reversal became one of the biggest drivers behind the company’s return to profitability, allowing its strong operating earnings to finally flow through to the bottom line.
The company’s shift toward a data-driven business model also became increasingly visible during the period.
- Back in 2022, voice revenue was still MTN’s largest revenue stream, contributing about 43% of total revenue compared to 38% data.
- By 2023, data revenue had overtaken voice to become the company’s largest earnings contributor, signaling a major shift in consumer behavior as Nigerians increasingly spent more on internet access and digital connectivity than traditional voice calls.
That transition accelerated further in 2025 as data firmly established itself as the company’s dominant revenue engine.
- At the same time, MTN’s fintech business continued expanding rapidly, reinforcing the company’s evolution from a traditional telecom operator into a broader digital connectivity and fintech platform.
Still, risks remain despite the recovery.
MTN Nigeria may have returned to profitability, but financing pressure remains heavy. The company recorded finance costs of N143.27 billion in Q1 2026 alone, almost equal to the N147.29 billion it spent during the whole of 2022. This follows a finance cost of N524.91 billion recorded in 2025.
The recovery in MTN Nigeria’s earnings and balance sheet has triggered a sharp re-rating in the stock, pushing the company’s market capitalization to about N16.8 trillion and making it the third most capitalized stock on the Nigerian Exchange.
Importantly, the recovery has also returned MTN Nigeria to the path of dividend payments. After the FX crisis disrupted profitability, the company declared a total dividend of N20 per share for the 2025 financial year.
Despite the strong rally, MTN Nigeria’s valuation does not yet appear excessively stretched relative to the scale of its recovery.
- The company currently trades at a price-to-earnings ratio of about 15x, while EBITDA rose strongly to N2.74 trillion and return on assets stood at 25.9%.
Investor optimism reflects growing confidence that MTN Nigeria may have moved beyond the peak of its FX-driven crisis, with stronger operating profits, expanding data revenue, rising fintech adoption, and improving balance sheet strength now supporting a more sustainable earnings outlook
Overall, with a PEG ratio of just 0.32x, MTN Nigeria’s valuation suggests the stock may still be trading below the pace of its earnings recovery despite the sharp rally recorded over the last year. Given its earnings growth rate at least in the past 3 years, the stock appears undervalued.
By Idika Aja
