July 31, 2025/Cordros Report
MTN Nigeria Communications Plc (MTNN) released its unaudited Q2-25 results after market close yesterday (30 July), reporting earnings per share (EPS) of NGN13.41, a strong recovery from the loss per share of NGN6.08 in Q2-24. The performance was underpinned by a 68.1% y/y increase in revenue and a 21.80 ppts expansion in EBITDA margin to 53.7%. Consequently, H1-25 EPS printed NGN19.79 (vs. loss per share of NGN24.71 in H1-24).
Service revenue advanced by 68.1% y/y in Q2-25 (H1-25: +54.6% y/y), reflecting double-digit growth across all segments – data (+85.6% y/y; 53.4% of revenue), voice (+53.0% y/y; 36.5% of revenue), digital (+32.5% y/y; 1.7% of revenue), fintech (+84.2% y/y; 3.6% of revenue), and other service revenue (+31.7% y/y; 4.8% of revenue). Additionally, non-service revenue also grew by 40.6% y/y (H1-25: +43.1% y/y), buoyed by device and SIM sales. On a q/q basis, total revenue rose by 24.9%.
Data revenue remained the standout performer, driven by subscriber growth, increased data traffic, and price adjustments. Specifically, data subscribers rose by 11.8% y/y to 51.0 million (Q2-25 net additions: +0.70 million). Whereas data traffic expanded by 41.2% y/y, and average monthly usage per user rose by 26.3% y/y to 13.2GB. These trends were supported by rising smartphone penetration (+430bps y/y to 62.6%) and expanding 4G coverage (82.4%).
Elsewhere, voice revenue growth reflected increased subscriber minutes and improved customer value management. Despite SIM registration constraints from regulatory directives, MTNN recorded 6.7% y/y growth in voice subscribers to 84.70 million (Q2-25 net additions: +0.60 million). Meanwhile, digital and fintech segments benefited from higher demand for rich media and strong uptake of MTN Xtratime and other value-added services.
Furthermore, total expenses increased modestly by 14.3% y/y (H1-25: +18.7% y/y), supported by a relatively stable currency, cost optimization initiatives, and NGN114.00 billion in savings from tower lease renegotiations. As a result, EBITDA margin expanded significantly by 21.80 ppts y/y to 53.7% in Q2-25, marking the company’s highest quarterly EBITDA margin since Q1-22 (54.6%). For H1-25, EBITDA margin expanded by 14.94 ppts y/y to 50.5%.
Below the operating line, net finance costs fell by 57.4% y/y to NGN130.49 billion, aided by NGN295.00 million in FX gains (vs. NGN231.32 billion loss in Q2-24). However, we note that interest income declined by 26.2% y/y, while interest expense more than doubled (+127.6% y/y) to NGN133.26 billion primarily driven by a 97.2% y/y increase in interest expenses on leases and a 129.3% y/y rise in interest expenses on borrowings. In H1-25, net finance costs declined by 74.4% y/y, primarily due to 99.2% decrease in net FX losses to NGN5.23 billion.
Ultimately, pre-tax profit rebounded to NGN419.61 billion in Q2-25 (vs. a loss of NGN175.60 billion in Q2-24), while profit after tax came in at NGN281.17 billion (vs. a loss of NGN126.36 billion).
Management call this afternoon at 3.00 pm Nigerian time. Click here to register.
Comment: As anticipated, MTNN delivered a stellar performance in Q2-25, with record quarterly earnings fueled by the full impact of upward price adjustments and cost optimisation initiatives. In addition, the renegotiated tower leases and ongoing efficiency drive materially supported margin expansion. Looking ahead, we expect earnings momentum to remain strong in H2-25, driven by continued pricing benefits and a more stable macroeconomic environment. Based on the current earnings trajectory, we expect the company to restore its positive equity position by Q3-25. Our estimates are under review.
