MTN Nigeria’s stock price surged to ₦256 on Tuesday, reflecting a 9.87% increase following the Nigerian Communication Commission’s (NCC) approval of a 50% hike in telecom tariffs. The development has rekindled investor confidence in the company’s profitability prospects after two years of sustained losses.
In contrast, rival Airtel Africa’s stock remained stable, closing at ₦2,159 on Tuesday. The stability underscores the limited impact of the Nigerian tariff adjustment on Airtel’s valuation, given that its listing spans its entire African business portfolio.
Tuesday’s closing price marks MTN Nigeria’s highest level since March 2024, when the stock traded at ₦267.80. Back in December 2024, Iit was reported that the NCC was poised to approve the long-anticipated tariff hikes in January 2025, prompting a 9% jump in MTN’s stock price.
MTN Nigeria’s profitability has faced significant headwinds since 2023, driven by naira devaluation and accelerating inflation. The company’s Q3 2024 earnings report revealed a loss after tax of ₦514.9 billion for the first nine months of the year, a steep 59.2% decline compared to the same period in 2023.
Despite the challenges, MTN Nigeria is taking strategic steps to reverse its fortunes. According to its Q3 2024 earnings report, the approved tariff hike is expected to mitigate the adverse impact of macroeconomic conditions and enhance the company’s profitability.
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Additionally, the company announced on January 17 that it had raised an additional ₦42.20 billion through a commercial paper issuance, bolstering its efforts to restore financial stability.
“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, MTN Nigeria’s CEO, in the earnings report.
With the newly approved tariff adjustment and strategic capital-raising efforts, MTN Nigeria appears to be charting a course toward recovery. However, the company’s ability to sustain this momentum amid persistent economic challenges will remain under close scrutiny.
