MTN Nigeria Reports Record H1 2026 Earnings Growth as Tariff Adjustments, Data Demand and FX Stability Drive Profitability

Executive Summary

Analyst: Qudus Adebara (Research Analyst, DLM Capital Group)

MTN Nigeria Communications Plc delivered a landmark financial performance for the six months ended June 30, 2026, supported by strong revenue expansion across data, voice and digital services, improved operating leverage, and a significant recovery in profitability.

Revenue grew by 25.9% year-on-year (YoY) to ₦2.99 trillion, driven primarily by sustained demand for data services, continued smartphone adoption, enterprise digitalization, and the impact of tariff adjustments implemented earlier in the year. Strong topline growth, combined with easing foreign exchange pressures and lower finance costs, lifted Profit Before Tax (PBT) by 75.4% YoY to ₦1.09 trillion.

Profit After Tax (PAT) surged 70.6% to ₦707.54 billion, while earnings per share increased to ₦33.76 from ₦19.80 in the corresponding period of 2025. The Group also generated robust operating cash flows exceeding ₦1.53 trillion, reinforcing its capacity to fund network expansion, digital investments, and shareholder returns.

Financial Highlights – Statement of Profit or Loss (₦’million, Group)

₦’million           H1 2026            H1 2025            YoY %

Revenue            2,993,064        2,377,752        +25.9%

Operating Profit            1,266,556        892,823            +41.9%

Finance Income           46,797 14,414 +224.7%

Finance Costs               (258,129)         (279,745)         -7.7%

Net FX Gain/(Loss)     36,362 (5,230)               NM

Profit Before Tax            1,091,586        622,262            +75.4%

Tax Expense    (384,045)         (207,406)         +85.2%

Profit After Tax                707,541            414,856            +70.6%

EPS (₦)                33.76  19.80  +70.5%

Revenue Performance

MTN Nigeria sustained strong momentum across its core service lines, with data revenue remaining the principal growth engine.

Revenue Breakdown

Segment          H1 2026 (₦'m)               H1 2025 (₦'m)               YoY %

Data     1,699,899        1,228,924        +38.3%

Voice   897,139            780,177            +15.0%

SMS      112,677            92,432 +21.9%

Interconnect & Roaming        112,196            114,429            -2.0%

Value Added Services               77,055 82,763 -6.9%

Digital Services             58,663 48,448 +21.1%

Handsets & Accessories         11,032 8,532  +29.3%

Other Revenue              23,897 21,999 +8.6%

Total Revenue 2,993,064        2,377,752        +25.9%

Key Revenue Drivers

Data Business Remains Dominant

•             Data contributed approximately 56.8% of total revenue.

•             Revenue from data services expanded by ₦471 billion YoY.

•             Growth supported by:

o             Rising smartphone penetration.

o             Increased video streaming and digital consumption.

o             Growing enterprise connectivity demand.

o             Expansion of broadband services.

Voice Revenue Resilience

•             Voice revenue rose 15% YoY despite market maturity.

•             Continued subscriber growth and improved customer engagement supported performance.

Digital Services Expansion

•             Digital revenue increased 21.1%.

•             Reflects growing adoption of entertainment, cloud and digital ecosystem offerings.

Profitability and Margins

Strong Operating Leverage

Operating profit rose 41.9% to ₦1.27 trillion, outpacing revenue growth.

Margin                H1 2026            H1 2025

Operating Margin        42.3% 37.6%

PBT Margin      36.5% 26.2%

PAT Margin       23.6% 17.4%

Lower Network Operating Costs

Direct network operating costs declined despite revenue growth.

Item     H1 2026 (₦'m)               H1 2025 (₦'m)

Direct Network Costs               629,275            685,307

This reflects:

•             Improved operational efficiencies.

•             Better energy management initiatives.

•             Enhanced network utilization.

Finance Income Growth

Finance income surged more than threefold.

Item     H1 2026 (₦'m)               H1 2025 (₦'m)

Finance Income           46,797 14,414

The increase was driven by:

•             Higher investment yields.

•             Increased treasury placements.

•             Gains on financial investments.

Foreign Exchange Recovery

A major earnings catalyst was the reversal of foreign exchange losses.

Item     H1 2026            H1 2025

Net FX Gain/(Loss)     36,362 (5,230)

The stabilization of the naira and improved foreign currency management significantly reduced financial pressure.

Profit After Tax

PAT increased by 70.6% to ₦707.54 billion, reflecting strong operational execution and a more favorable macroeconomic environment.

Balance Sheet Overview (₦’million, Group)

₦’million           Jun-26 Dec-25               % Δ

Total Assets    5,972,987        5,403,489        +10.5%

Total Equity      930,605            548,712            +69.6%

Total Liabilities              5,042,382        4,854,777        +3.9%

Cash & Cash Equivalents      458,930            632,501            -27.4%

Current Investments 415,250            162,255            +155.9%

Borrowings      342,591            527,669            -35.1%

Interpretation

Strong Equity Expansion

•             Retained earnings increased sharply from ₦400.40 billion to ₦793.07 billion.

•             Equity rose by nearly 70%, reflecting strong profit generation.

Reduced Debt Exposure

•             Total borrowings declined by ₦185.1 billion.

•             Improved leverage profile reduces future financing risks.

Strategic Liquidity Management

•             Cash balances moderated due to higher capital expenditure and dividend payments.

•             Increased investments in treasury instruments enhanced yield generation.

Cash Flow Highlights (₦’million, Group)

₦’million           H1 2026            H1 2025

Operating Cash Flow 1,534,955        955,683

Investing Cash Flow  (1,108,045)     (642,785)

Financing Cash Flow (597,714)         (310,927)

Net Change in Cash  (170,804)         1,971

Closing Cash Balance             459,334            257,599

Key Observations

Exceptional Operating Cash Generation

•             Operating cash flow increased 60.6% YoY.

•             Demonstrates strong earnings quality and cash conversion.

Continued Network Expansion

Capital expenditure remained elevated:

Investment Item        H1 2026 (₦'m)

Property & Equipment              763,852

Intangible Assets        31,228

Right-of-use Assets   5,991

These investments support:

•             Network modernization.

•             Capacity expansion.

•             Broadband penetration.

•             Future digital growth.

Significant Shareholder Returns

•             Dividend payments amounted to ₦314.59 billion.

•             Highlights management's commitment to shareholder value creation.

Key Ratios & Indicators (H1 2026)

Metric Performance

Revenue Growth          +25.9%

Operating Profit Growth          +41.9%

PBT Growth     +75.4%

PAT Growth      +70.6%

EPS Growth     +70.5%

Asset Growth +10.5%

Equity Growth                +69.6%

Borrowing Reduction -35.1%

Operating Cash Flow Growth              +60.6%

Operating Margin        42.3%

PAT Margin       23.6%

Strategic Insights

• Data remains MTN Nigeria's most important growth driver.
• Improved FX stability has significantly strengthened earnings quality.
• The company continues to invest aggressively in network infrastructure and digital platforms.
• Fintech remains a long-term growth opportunity despite temporary operational disruptions during the period.

Strengths

• Strong revenue growth across core service segments.
• Significant improvement in profitability.
• Robust operating cash flow generation.
• Reduced debt burden and stronger balance sheet.
• Market leadership in data and digital services.

Weaknesses

• Rising employee and operating expenses.
• Higher impairment charges on financial assets.
• Declining cash balances due to elevated investments and dividend payments.
• Continued exposure to energy cost volatility.

Opportunities

• Growing smartphone penetration.
• Expansion of broadband and enterprise solutions.
• Accelerating digital transformation across Nigeria.
• Recovery and scaling of fintech operations.
• Increased monetization of digital ecosystems.

Threats

• Inflationary pressures affecting consumer spending.
• Potential regulatory interventions in telecom pricing.
• Foreign exchange volatility.
• Rising energy and infrastructure costs.
• Competitive pressures within the telecommunications industry.

Outlook

Near-Term Outlook (6–12 Months)

Management expects continued growth supported by:

• Rising data consumption.
• Expansion in broadband adoption.
• Recovery in fintech transaction volumes following the resumption of airtime and data credit services.
• Ongoing investments in network quality and coverage.

While energy costs and inflation remain key risks, the company expects operating momentum to remain strong through the second half of 2026.

Medium-Term Outlook (3–5 Years)

MTN Nigeria remains well positioned to benefit from Nigeria's expanding digital economy. Management targets:

• Service revenue growth of at least low-20%.
• EBITDA margins in the mid-to-high 50% range.
• Stronger cash generation.
• Sustainable dividend growth.

The long-term investment case remains anchored on data growth, enterprise digitalization, broadband penetration, and fintech expansion.

Analyst View

"MTN Nigeria delivered an outstanding H1 2026 performance, driven by strong data revenue growth, improved operating leverage, and a sharp recovery in foreign exchange earnings. The combination of robust cash generation, declining debt levels, and continued investment in digital infrastructure reinforces the company's position as Nigeria's leading telecommunications operator and one of the strongest earnings growth stories on the NGX."

Conclusion

MTN Nigeria Communications Plc delivered a record H1 2026 performance, with revenue approaching ₦3 trillion and profit after tax exceeding ₦700 billion. Strong growth in data services, improved FX dynamics, enhanced operating efficiency, and robust cash generation collectively strengthened earnings and shareholder value. Despite ongoing macroeconomic challenges, MTN remains well positioned to capitalize on Nigeria's long-term digital transformation and telecommunications growth opportunities.