MTN Nigeria Crosses N1Trn revenue mark, but Profit nosedives in Q1 2025
MTN Nigeria Communications Plc has hit a milestone N1.0 trillion in service revenue for the first quarter of 2025, a whopping 40.5% year-on-year growth that underscores the enduring demand for telecom services in Africa’s largest market. But beneath the headline figure lies a deeper story of profit pressures, regulatory hurdles, and capital reinvestment.
The telco disclosed the figures in a corporate filing with the Nigerian Exchange Limited (NGX) on Tuesday, offering investors and analysts a mixed bag: impressive top-line growth tempered by a 134% plunge in profit after tax, which fell to ₦133.7 billion from ₦392.7 billion in Q1 2024.
Behind the Numbers: Revenue Up, But Profit Down
The surge in revenue — from ₦753 billion in Q1 2024 to ₦1 trillion in Q1 2025 — is largely attributed to expansion in data services, sustained mobile subscriptions, and recent regulatory approval for long-delayed price adjustments in telecom tariffs. MTN’s total subscribers rose by 8.2% to 84.1 million, while active data users jumped 13% to 50.3 million, reflecting Nigeria’s insatiable appetite for mobile connectivity.
But these gains were offset by a sharp rise in operating costs, currency devaluation effects, and a heavier tax burden, leading to a staggering collapse in net profit. In a high-inflation environment where exchange rate volatility and rising energy costs plague corporate margins, MTN is hardly alone — but the scale of the profit contraction surprised even seasoned market watchers.
Resilience Through Strategy and Scale
Despite the earnings decline, MTN is still building operational momentum. The company’s Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) soared 65.9% to ₦492.7 billion, with an EBITDA margin of 46.6% — up 7.2 percentage points. This indicates improved efficiency in core operations, and suggests the company is managing scale better, even amid macroeconomic headwinds.
Free cash flow for the quarter stood at ₦209.9 billion, providing breathing room for future expansion. Earnings per share (EPS), however, declined to ₦6.38, reinforcing the need for stronger margin preservation.
Capital Reinvestment: Betting Big on the Future
CEO Karl Toriola, in his remarks, described the Q1 results as a “solid step forward,” noting that price adjustments approved late in the quarter have not yet fully reflected in the numbers. He emphasized that ₦202.4 billion in capital expenditure — up 159% year-on-year — has been deployed to expand capacity, enhance user experience, and support digital inclusion in underserved areas.
Toriola also highlighted that restoring profitability and achieving a positive net asset position remain core priorities. “The approval of tariff adjustments was essential,” he said, signaling that future results could show stronger bottom-line recovery once the full pricing impact is felt.
Investor Implications: A Story of Long-Term Play
For investors, the results signal a turning point in MTN’s strategic recalibration. While the immediate profit dip may spook some short-term traders, long-term shareholders are likely to focus on:
- Subscriber and data growth trends
- Regulatory clarity on pricing
- Steady EBITDA performance
- Massive reinvestment into infrastructure
MTN Nigeria’s resilience will ultimately depend on navigating the FX market, sustaining service quality amid rising demand, and leveraging its fintech arm (MoMo) to capture value beyond voice and data.
BRANDECONOMY Insight
MTN’s Q1 2025 is a classic case of growing pains in a reforming economy. Revenue strength is undeniable — but it’s what MTN does next, with pricing, product innovation, and policy engagement, that will determine its long-term value in Nigeria’s $75 billion digital economy.
