Amid a government approved telecom tariff hike that caught Nigerians by surprise, MTN netted ₦133.7 billion in the first quarter of 2025, a significant recovery from a loss of ₦392.7 billion recorded the same period in 2024.
A significant decrease in foreign exchange losses and an increase in operating profit propelled the turnaround.
The telecom behemoth, which has 81 million subscribers, claimed on Tuesday that the recovery occurred despite a 25 percent rise in operating costs, mostly due to the naira’s depreciation.
There was a major impact on lease-related costs, which made up more than 60 percent of total operating expenses. In the first quarter of 2025, the value of the naira dropped 72.2 percent year over year to N1,546.1/$ from N897.8/$ in the same period in 2024.
The business claimed that revised lease terms limited inflation-linked escalations and helped lower exposure to currency volatility. The new Finance Act’s VAT exemptions for energy components also helped to boost margins.
“Overall, we reported a significant turnaround in our bottom line, with a profit after tax of N133.7 billion versus a loss of N392.7 billion in the prior year,” part of the report highlighted.
EBITDA increases by 65.9%
Lease renegotiations, VAT exemptions, and continuous cost-cutting initiatives helped to boost earnings before interest, taxes, depreciation, and amortisation by 65.9 percent and the EBITDA margin by 7.2 percentage points to 46.6 percent.
New lease additions resulted in a 22.1 percent increase in depreciation and amortisation. Due to higher interest rates and larger lease obligations, net finance costs increased by 44.0 percent. However, thanks to the relative stability of the naira throughout the quarter, net foreign exchange losses dropped precipitously by 99.2 percent to N5.5 billion.
Implementation of telecom tariff hike
Additionally, MTN started implementing a new tariff structure in phases in mid-February 2025. Most of the changes that affected its voice and data bundles went into effect in March. Although Q2 2025 is when the full impact on usage and revenue is anticipated, preliminary data points to robust customer demand supported by focused CVM initiatives.
“We remain optimistic about our growth trajectory and the opportunities within our market,” MTN Nigeria CEO Karl Toriola stated in the report. “Our strong performance in the first quarter underscores our ability to navigate a complex and evolving macroeconomic environment while remaining steadfast in executing our strategic priorities.”
He added, “We are encouraged by the improvements in Nigeria’s macroeconomic conditions, marked by increased forex liquidity, a relatively stable naira, and easing inflation. However, the recent escalation in global geopolitical and trade tensions presents risks to the broader outlook.”
Free cash flow was N209.9 billion, which was 54.8 percent less than the year before due to MTN’s increased capital expenditures and a difficult comparison to Q1 2024, when it profited from currency-driven valuation effects.
By December 2024, the company’s retained losses had decreased to negative N474.1 billion from negative N607.5 billion. In the same time frame, shareholders’ equity improved as well, going from negative N458.0 billion to negative N324.6 billion.
MTN Nigeria’s data revenue increases by 51.5%
Due to rising consumption and an increasing number of active users, data revenue increased by 51.5 percent. At 12.8GB, average usage per subscriber increased 29.5 percent, while data traffic increased 46.4 percent. Strong demand for high-speed data services was reflected in the quarter’s four million new smartphone additions, which saw smartphone penetration reach 60.7 percent.
MTN prioritised capacity upgrades over new rollouts, so its 4G coverage increased by 0.2 percentage points to reach 82.7 percent of the population, while its 5G coverage remained steady at 12.7 percent.