MTN Nigeria: Analysts See Double-Digit Upside Potential for 2025
With less than zero shareholders funds, telecommunication company MTN Nigeria Plc has been projected to return to profitability in financial year 2025 after a sequence of net losses caused by exposure to foreign currency-denominated liabilities.
Retained losses dragged shareholders’ equity to negative N458 billion, up from (N40.8 billion) in 2023. Loss after tax settled above N400 billion in 2024, details from the audited report revealed. Equities analysts at Meristem Securities Limited have set a Dec target price of N309.85 per share for MTN Nigeria Plc, with 26.47% upside potential.
The telecom stock fell below analysts N245 reference price in the equities market following mild profit-taking activity. MTN Nigeria’s share price had peaked at N264.2, its highest market price in 52 weeks. In 2024, MTN Nigeria posted a 36.03% year-on-year increase in revenue, reaching N3.36 trillion from N2.47 trillion, driven by robust growth across all revenue segments—data, voice, and SMS.
Equities analysts noted that the data segment remained the largest revenue contributor. Voice revenue remained the second-largest contributor to total revenue, accounting for 32.89%—down from 38.69% in 2023 – largely due to modest subscriber growth of +1.60% to 80.9 million.
Despite a 46.60% decline in active wallets to 2.80 million, fintech revenue grew by 20.88%, driven by a 4.30% rise in transaction volume to 448.00 million, up from 429.50 million in 2023. >>> MTN Nigeria Net Loss Grows by 192% to N400 billion
Overall, Average Revenue Per User (ARPU) increased by 28.50% to N3,222 from N2,508 in 2023. Notably, the Nigerian Communications Commission’s (NCC) intervention in addressing the outstanding USSD debt recovery resulted in an additional N74.00bn in revenue, further driving overall revenue growth.
“We maintain a positive outlook for the company’s revenue performance in 2025. The recent approval by the Nigerian Communications Commission (NCC) for a 50.00% tariff hike presents a significant catalyst for MTNN’s growth prospects”, Meristem Securities Limited said.
Analysts said this optimism is driven by expected sustained growth in data revenue, supported by efforts to expand data traffic, strengthen network coverage, and drive greater adoption of 4G and 5G services.
Additionally, the company’s continued push to broaden financial services access is expected to accelerate fintech growth. Consequently, the investment firm forecast the company to close the year with a revenue of N4.90 trillion. An audited report for 2024 showed that MTN Nigeria’s operating expenses surged by 61.68% year on year in 2024FY, reaching N2.05trn from N1.27trn in 2023.
The increase was primarily driven by a sharp rise in direct network operating costs, which soared by 89.41% to N1.23trn from N650.50bn in the previous year – largely due to significant spikes in lease costs and network maintenance expenses.
Estimating for 2025. Meristem said while MTNN’s operating costs are expected to remain elevated in the near term due to inflationary pressures and Naira depreciation, it anticipates a slower pace of increase as inflation eases and exchange rate stability improves. Additionally, direct network operating expenses could see some relief following the successful renegotiation of tower lease contracts, the investment firm added.
Analysts said the company’s recent infrastructure-sharing agreement with AIRTELAFRI could help reduce operational expenses, further easing cost pressures. It is noted that MTNN’s substantial reduction in foreign currency debt is likely to drive down finance costs in the near to mid-term, enhancing its overall profitability outlook.
“… we envisage a rebound to annual profitability for MTN Nigeria in 2025,” Meristem Securities Limited said in its report. MTN Nigeria’s finance costs soared by 82.19% to N431.65 billion in 2024, up from N236.93 billion in 2023, predominantly owing to a sharp rise in interest expenses on leases, borrowings, and other finance charges.
Furthermore, net foreign exchange losses surged by 24.98% to N925.36 billion, reflecting higher losses on leases, borrowings, and trade payables on the back of the Naira’s depreciation during the period.
Subsequently, key profitability indicators remained in negative territory, with the net margin at 11.92%, return on assets (ROA) at 9.54%, and return on equity (ROE) at 87.43%. #MTN Nigeria: MTN Nigeria: Analysts See Double-Digit Upside Potential for 2025 Zenith Bank Crosses N2trn Ahead of Annual Meeting, Dividend Payment
