August 7, 2026/InvestmentOne Report
MTN Nigeria recorded revenue of NGN2.99 trn in H1 2026, up 25.88% YoY, driven by increased market penetration and continued growth in data consumption. Data revenue increased by 38.30% to NGN1.70 trn, raising its contribution to Group revenue to 56.80% from 51.70%, while voice revenue rose by 15.00% to NGN897.14 bn. SMS and digital revenue grew by 21.90% and 21.10%, respectively, meanwhile value-added-services revenue declined by 6.90% to NGN77.06 bn, partly due to the temporary suspension of XtraTime.
NCC data show that MTNN account for 51.19% of Nigeria’s 189 million active mobile subscriptions (c.96.9 million subscribers). This scale provides a sizeable base for converting voice-led customers to higher-value data services. With national internet traffic increasing by approximately 44.00% YoY and 4G and 5G penetration rising. We expect data, home broadband connectivity and the resumption of airtime and credit services to remain the key growth drivers in the full year numbers. However, revenue growth should moderate from the post-tariff surge recorded in 2025, settling closer to management’s guidance of approximately 20.00%.
Cost Structure and EBITDA margins: Revenue growth of 25.88%, combined with an 8.18% decline in direct network operating costs to NGN629.28bn, drove a significant improvement in operating leverage. Lower BTS lease-related expenses supported a 39.2% increase in EBITDA to NGN1.67trn, with EBITDA margin expanding by 530bps to 55.90%, while operating profit rose by 41.9% to NGN1.27trn. This performance was achieved despite a 148.0% increase in employee costs, driven mainly by performance-linked and share-based incentives, and a 433.4% rise in financial-asset impairments associated with the suspension of XtraTime services. EBITDA margins should remain resilient as these exceptional costs normalise, energy prices moderate and MTNN increases its alternative fuel sources. Furthermore, XtraTime remains a near-term watchpoint, as its temporary suspension resulted in higher expected-credit-loss provisions. However, the suspension was intended to strengthen operational controls, which should support improved credit quality and more sustainable growth following its resumption.
Financing Costs and PAT: Interest on borrowings declined by 58.30% to NGN33.19bn, contributing to a 7.70% reduction in total finance costs to NGN258.13bn. Lease interest increased modestly to NGN197.43bn and accounted for 76.5% of finance costs, reflecting MTNN’s sizeable lease-backed network infrastructure and continued capacity expansion rather than a deterioration in its financing position. PBT consequently increased by 75.42% to NGN1.09trn, while PAT rose by 70.55% to NGN707.54bn and EPS advanced to NGN33.76 from NGN19.80. Earnings were further supported by higher finance income and a net FX gain of NGN36.36bn, compared with a NGN5.23bn loss in H1 2025. We expect lower conventional interest costs, improved lease-cost coverage and stronger refinancing capacity following MTNN’s recent credit-rating actions to remain supportive of earnings growth.
Balance-Sheet Strengthening and Credit Profile: MTNN’s balance sheet strengthened materially, supported by debt repayment, cash accumulation and continued investment in productive assets, as plant and equipment increased to NGN2.22trn from NGN1.85trn, reflecting continued network investment. Total borrowings declined by 35.1% from FY 2025 to NGN342.59bn following NGN176.35bn in principal repayments.
A move which increased in credit rating by global rating agencies to Aaa from Aa+. Similarly, Cash and cash equivalents of NGN458.93bn exceeded conventional borrowings by NGN116.34bn, placing the company in a net-cash position. The full repayment of foreign-currency debt also removed FX linked borrowing exposure. Group equity increased to NGN930.61bn from NGN548.71bn at FY 2025 and negative NGN42.45bn in H1 2025, supported by retained earnings of NGN793.07bn. However, lease liabilities remained elevated at NGN2.44trn, while current liabilities of NGN2.56trn exceeded current assets of NGN1.34trn. We remain bullish on the balancesheet outlook, as continued profitability and strong operating cash flow should support further growth in retained earnings, equity and cash balances, despite ongoing capex, lease and dividend commitments.
Capex, ESG initiatives and Dividend Payout: Capital expenditure excluding right-of-use assets increased by 1.20% to NGN620.51 bn, equivalent to 20.70% of revenue, compared with 25.8% in H1 2025. Investment remained focused on expanding network capacity and coverage and supporting home-broadband growth. Property, plant and equipment increased by 19.58% to NGN2.22 trn from NGN1.85 trn in December 2025. Net cash generated from operating activities rose by 60.6% to NGN1.53 trn, while MTN Nigeria’s reported free cash flow increased by 73.9% to NGN712.72 bn. Accelerated investment should support data capacity, network availability, broadband growth and enterprise demand. MTNN’s energy-efficiency program also offers cost relief, generating estimated diesel savings of NGN5.6 bn. MTNN also invested NGN6.8bn in ESG-related infrastructure, including BTS solar deployment, high-efficiency cooling, EV charging facilities and cleaner energy solutions. Renewable energy’s share of its energy mix increased to 1.40% from 0.05% in FY 2025.
The Board approved an interim dividend of NGN26.00 per share, representing a payout ratio of approximately 77.00% and a yield of 2.60%. The distribution reflects MTNN’s strengthened capacity to return cash to shareholders, supported by robust operating cash flow, lower conventional borrowings and reduced interest obligations. Importantly, the proposed payout did not constrain network investment, as H1 cash capex was not affected and remained adequately covered by operating cash flow. Retained earnings also recovered to NGN793.07bn, from an accumulated loss of NGN192.89bn in H1 2025, providing a firmer basis for distributions and reinforcing management’s confidence in the sustainability of MTNN’s earnings and cash-flow recovery.
OUTLOOK:
We maintain a STRONG BUY rating on MTN Nigeria. Our blended valuation, based on FCFF, FCFE, economic profit, dividend discount and relative P/E methodologies, produces a fair value of NGN1,239.85 per share, representing 46.73% upside from the reference market price of NGN845.00. Our recommendation is supported by MTNN s market leadership, stability of the local currency, improving customer monetization and increase in revenue generating CAPEX. Likewise, the elimination of foreign-currency debt and improved credit ratings, alongside the resumption of interim dividends further strengthened the investment case. Key risks include residual operating FX exposure, country specific systemic risks, and stricter regulatory changes. Nevertheless, MTNN s earnings resilience, valuation upside supports our STRONG BUY recommendation..
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