MTN Nigeria’s share price surged to ₦256 on Tuesday, reflecting a significant 9.87% increase following the approval of a 50% hike in telecom tariffs by regulators. This notable rise indicates growing investor confidence in the company’s potential profitability after enduring two years of consistent losses.
In contrast, Airtel Africa’s stock remained stable, highlighting the minimal impact of the Nigerian tariff adjustment on its overall valuation, given that its listing encompasses its entire African business portfolio. Airtel Africa’s share price closed at ₦2,159 on Tuesday.
Tuesday’s share price marks MTN Nigeria’s highest since March 2024, when it traded at ₦267.80. On December 23, 2024, Innovation Village reported that the Nigerian Communication Commission (NCC) would approve a long-awaited proposal for telecom tariff hikes in January 2025, leading to a 9% jump in MTN’s stock price.
Since 2023, MTN Nigeria has faced significant profit declines due to the devaluation of the naira and accelerating inflation. The company reported a loss after tax of ₦514.9 billion in the first nine months of 2024, representing a 59.2% decrease compared to the previous year.
MTN Nigeria has been focused on boosting its earnings to recover from these losses, as outlined in its Q3 2024 earnings report. The recently approved tariff hike is expected to mitigate the adverse effects of the challenging macroeconomic environment and enhance the company’s profitability.
The path to recovery for MTN Nigeria is ongoing. One of the strategies to restore its financial health includes raising fresh capital. On January 17, the telecom giant announced that it had secured an additional ₦42.20 billion through the issuance of commercial paper.
“In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions,” said Karl Toriola, CEO of MTN Nigeria, in the Q3 2024 earnings report.
