How MTN Nigeria delivered one of its biggest quarterly profits on record

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:

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.

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.

The acceleration reflects a combination of stronger data consumption, tariff adjustments implemented in early 2025, subscriber growth, and expanding digital services adoption.

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 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.

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.

That transition accelerated further in 2025 as data firmly established itself as the company’s dominant revenue engine.

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.

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.