November 12, 2026/InvestmentOne Report
MTN Nigeria sustained its earnings growth through 9M 2026, with revenue rising by 23.60% YoY to NGN4.61trn, operating profit increasing by 38.20% to NGN1.99trn and PAT advancing by 55.30% to NGN1.17trn. Unlike the 2025 rebound, which benefited heavily from FX normalisation and tariff adjustments, this performance reflects stronger operating leverage and a lighter financing burden.
Stand alone Q3 revenue grew by 19.70% YoY to NGN1.62trn, while quarterly PAT increased by 36.50% to NGN457.63bn. Although the revenue growth rate moderated against a tougher tariff-adjusted base, the improvement in quarterly profitability suggests that the earnings recovery is becoming more operationally driven.
Revenue Composition and Growth Outlook
Data remained MTNN’s largest revenue contributor, increasing by 35.96% YoY to NGN2.68trn and accounting for 58.18% of group revenue, compared with voice revenue of NGN1.36trn (+13.84% YoY). Management reported 57.20 million active data subscribers (+12.00%), average monthly usage of 15.30GB (+16.20%) and Mobile subscribers reached 94.70 million (+10.90%) reinforcing our expectation that traffic growth, rather than another major tariff adjustment, will continue to drive growth metrics., while investments in fibre and network capacity should support rising demand. Fintech, however, remained a weak spot following the April-June suspension of airtime and data lending. Although management indicated that the service rebounded in Q3 and expects further normalisation, although the MoMo platform migration and lower active-wallet count make the pace of recovery worth monitoring.
Operating Cost Dynamics and Margin Expansion
Cost discipline remained the standout feature of the results. Direct networking expenses declined by 1.65% to NGN1.02trn despite revenue growth, while operating margin widened to 43.19% from 38.64%. Similarly, reported EBITDA grew by 36.80% to NGN2.62trn, with margin expanding by 550bps to 56.90%, supported by tower-cost savings, a firmer naira and inputVAT recoveries. Notably, BTS operating costs fell by 7.22% over nine months but increased in Q3, showing the impact of elevated energy prices. Employee expenses also rose by 96.52% to NGN186.80bn, partly because share-based remuneration increased following the shareprice rally; depreciation and amortisation climbed by 32.64% to NGN631.95bn driven by major investment in revenue generating infrastructure. We therefore expect operating margins to remain healthy, given the
FX, Finance Costs and Earnings Quality
Finance costs declined by 11.04% to NGN359.58bn, against finance income of NGN82.58bn, as lower borrowings reduced interest expense. MTNN also recorded an NGN80.14bn FX gain versus NGN55.58bn a year earlier, principally reflecting translation gains on lease liabilities. These below-the-line benefits supported profit, but the stronger rise in operating earnings suggests that the improvement is not merely an FX story. The effective tax rate increased to 35.11% from 33.40%, with a NGN93.90bn development levy contributing to the NGN630.47bn tax charge. Even so, net margin improved to 25.26% from 20.11%, and basic EPS increased to NGN55.60 from NGN35.80.
Balance Sheet and Cash Flow Outlook
Total assets expanded by 10.56% from December 2025 to NGN5.97trn, largely as PPE increased by 25.76% to NGN2.33trn. Conventional borrowings declined by 36.83% to NGN333.32bn, below cash of NGN380.99bn; nevertheless, NGN2.46trn in lease liabilities and a current ratio of 0.45x show that liquidity still requires careful management. Net operating cash flow increased by 48.18% to NGN2.31trn, comfortably exceeding PAT and supporting the quality of earnings. However, cash purchases of PPE reached NGN1.00trn, while dividends of NGN859.70bn, loan repayments and lease payments contributed to a 39.76% decline in the cash balance. We expect continued investment in network capacity, but dividend sustainability will depend on preserving cash Balances while meeting short term liquidity needs.
Revised Earnings and Valuation Outlook
We maintain our STRONG BUY recommendation on MTN Nigeria Communications Plc. Our blended valuation, based on the FCFF, FCFE, economic profit, dividend discount and relative P/E methods, produces a target price of NGN1,217.82 per share, implying a 45.49% upside from the current price of NGN837.00. The valuation is primarily supported by our expectation of sustained earnings growth, stronger free cash flow generation and a gradual decline in MTN Nigeria s cost of capital.
Our earnings expectations remain supported by management s medium-term guidance of at least low-20% average service revenue growth and an EBITDA margin within the mid-to-high-50% range. We expect deeper data adoption, rising usage and the continued expansion of home broadband to remain the principal growth drivers, while the recovery of the airtime and data credit service and the migration of customers to the new MoMo platform should provide additional upside to fintech earnings. Furthermore, continued investment in network coverage, capacity and quality should support subscriber growth and improve the scalability of future earnings.
At the same time, stronger operating leverage and the continued implementation of management’s efficiency programme should protect margins despite energy and inflationary pressures. We also expect the stronger naira, declining borrowings and MTN Nigeria’s fully nairadenominated, fixed-rate debt structure to reduce earnings volatility and financial risk
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