MTN Nigeria Topples Dangote Cement as Market Value Hits N6Trn

Now rated as the second largest by market valuation, MTN Nigeria Plc’s shares outstanding have been re-rated by a slew of equity investors with a short, medium and long-time interest in the telecom company.

Having toppled Dangote Cement Plc as the next most valuable after Airtel Africa in the local bourse, MTN Nigeria Plc market on Friday inched to about N6 trillion details tracked by MarketForces Africa showed.

Some analysts have projected that the telecom company’s profit would pick up after a rough and tough experience in the operating environment last year. The telco earnings came under pressure due to large FX losses which lifted its net finance costs.

The Naira devaluation raised MTN Nigeria’s foreign currency liabilities, and the exposure had a negative run on its earnings performance.

Profit backtracked, and the market spotted the earnings lapse which triggered first-instance selling rallies after the result was posted on the Nigerian bourse. In the third quarter of 2023, MTN Nigeria’s profit moderated to N31.08 billion from N132 billion.

In terms of performance, MTN still lords over other rivals in the market with a solid revenue and profitability track record. Though the telecom is valued below its immediate rivals, some analysts see the disparity as something worth pondering over.

MTN Nigeria Plc stands rock solid in key performance indicators than Airtel Africa which is currently the largest company on Nigerian Exchange by market capitalisation.

The telecommunications sector has also been affected by current macroeconomic issues, as seen in dwindling industry numbers. In Q3 2023, the sector grew 7.74% compared with 9.74% in Q2 2023, while contributing 15.97% to the aggregate real GDP growth.

According to the Nigerian Communications Commission (NCC), Teledensity, the number of active telephone connections per 1,000 inhabitants living within an area, declined to 115.63% in August 2023 from 115.70% in July 2023.

Broadband penetration also declined to 45.57% from 47.01%, while mobile subscriptions declined to 220.72 million from 220.86 million.

Players in the sector in recent times have been faced with significant growth in OPEX due to the Naira depreciation, elevated inflation and scarcity of FX leading to increased costs of lease rentals and additional site rollout.

Ticker: MTNN remains on the top Nigerian stockbroking firm buying recommendations lists while its share price in the local bourse continues to become more expensive. Dangote Reacts to EFCC Visit to Headquarters