MTN Nigeria generates N355.5bn Q1 profit

MTN Nigeria Communications Plc has reported a profit after tax of N355.5bn in the first quarter of 2026, up 165.9 per cent year-on-year.

The performance was detailed in the company’s unaudited results released on Wednesday, where it also flagged potential pressure on margins from rising energy costs.

The telecom operator said it anticipates a 1.8 to 2.0 percentage point decline in full-year Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin if diesel prices average N2,000 per litre in the second half of the year.

“We continue to monitor developments in the operating environment, including energy price volatility and regulatory dynamics,” Chief Executive Officer Karl Toriola said in the Q1 report.

The outlook comes amid renewed volatility in global energy markets. On Thursday, Dangote Refinery increased its diesel price to N1,800 per litre from N1,750, citing rising geopolitical tensions in the Middle East and a halt in loading operations at the facility. Brent crude traded at $124.9 per barrel (+5.82%), while West Texas Intermediate (WTI) stood at $109.2 per barrel (+2.18%).

Domestic market checks indicate that diesel prices trended higher across major depots nationwide. At the close of trading on Wednesday, prices had risen in several locations, with independent filling stations in some states reportedly selling at about N1,250 per litre.

Earlier in March, escalating tensions involving the United States, Israel, and Iran disrupted activity around the Strait of Hormuz, pushing crude oil prices above $100 per barrel and increasing global fuel import costs.

“Based on an assumed average Lagos ex-depot diesel price of N2,000 in H2, we estimate a 1.8–2.0 percentage point impact on full-year EBITDA margin,” the MTN executive added.

The telecom sector’s heavy dependence on diesel continues to amplify exposure to price shocks. Operators in Nigeria consume more than 40 million litres of diesel monthly to power base stations, largely due to unreliable grid electricity, according to the State of Africa’s Infrastructure Report 2025 by the Africa Finance Corporation. This equates to over 480 million litres annually, with estimated industry spending exceeding $350m.

Despite the cost headwinds, MTN Nigeria significantly ramped up investment during the quarter. Capital expenditure (excluding right-of-use assets) rose by 92.8 per cent year-on-year to N390.3bn, up from N202.4bn in Q1 2025.

The company said much of the spending was channelled into expanding network capacity and deepening its fixed broadband footprint, including fibre-to-the-home deployments and fixed wireless access infrastructure.

Financially, the group recorded a pre-tax profit of N546.42bn, marking a 169.64 per cent year-on-year increase. While this represents one of its strongest quarterly performances since 2019, it is about 4 per cent below the N569.59bn posted in the fourth quarter of 2025.

Revenue growth remained a key driver, rising 42 per cent year-on-year to N1.498tn, the highest quarterly revenue recorded by the company since 2019.

Earnings per share climbed 166 per cent to N16.95, accounting for nearly 30 per cent of the company’s full-year 2025 EPS.

Every year, this trajectory suggests earnings could exceed the prior year’s performance by roughly 30 per cent, implying a potential EPS of N67.80 if first-quarter momentum is sustained.