Executive Summary

1.      Tariff increases and regulatory support:

a.       Nigeria implemented phased tariff increases for data and voice from mid-February 2025, these price adjustments began to support revenue increases and margin recovery, with the full impact expected in Q2 FY25.

2.      Cost efficiency and margin expansion:

a.       Group EBITDA margin expanded to 44.1% (up 5.3%), supported by cost efficiency programmes, renegotiated tower leases, and disciplined expense management.

3.      Inflation and currency:

a.       Group blended inflation averaged 14.2% year-on-year in Q1 FY25, up slightly from 13.6% in Q1 2024. The removal of fuel subsidies in Nigeria in mid-2023 led to a spike in transportation and logistics costs, which continued to ripple through the economy into 2024 and early 2025.

b.      The Ghanaian cedi (GHS) has appreciated against both the dollar and the South African rand. The cedi’s gain was fuelled by high gold exports, fiscal discipline, tight IMF-backed policy, and a weaker US dollar boosting investor confidence.

4.      Intrinsic value increased by 34% to R149 due to:

a.       Strength of the Ghanaian cedi which enhances earnings stability and reduces currency-related losses.

b.      Successful renegotiation of tower leases which improved MTN’s cost structure and operational efficiency.

c.       Data and voice price increases in Nigeria which helped drive margin recovery.

Analyst thesis

1.      We remain positive on MTN earnings outlook due to the following reasons:

a.       MTN’s recent price increases in Nigeria, implemented to counter inflation and higher network expenses, are expected to be fully reflect from the Q2 FY2025 results onwards.

b.      MTN targets R7–8 billion in cost savings by 2026 through digitalisation and operational efficiencies which support margin expansion.

c.       Nigeria inflation is projected to decline to 22.1% by end-2025, easing operating costs and improving consumer affordability.

d.      Higher oil production should improve Nigeria’s fiscal and FX position, supporting MTN Nigeria’s operating outlook.

e.      The cedi’s appreciation supports earnings quality and enhances cash repatriation from Ghana.

2.      The $4.2 billion Turkcell lawsuit poses a notable risk, however, MTN’s underlying momentum and long-term growth drivers continue to support our investment case.