The share price of MTN Nigeria experienced a significant surge to ₦256 on Tuesday, representing a 9.87% increase following the approval of a 50% hike in telecom tariffs by regulators. This boost indicates growing investor confidence in the company’s profitability after a period of sustained losses.
In contrast, competitor Airtel Africa’s stock remained steady, indicating the minimal impact of the Nigerian tariff adjustment on the company’s overall value due to its extensive African business portfolio. Airtel Africa’s share price closed at ₦2,159 on the same day.
This recent price peak for MTN Nigeria is its highest since March 2024 when it reached ₦267.80. The stock price surged by 9% on December 23, 2024, following reports that the Nigerian Communication Commission would approve the telecom tariff hikes in January 2025.
MTN Nigeria has faced challenges in recent years, with profits declining due to currency devaluation and rising inflation. The company reported a significant after-tax loss of ₦514.9 billion in the first nine months of 2024, marking a 59.2% decrease compared to the previous year.
Efforts to recover from these losses have been underway, with a focus on boosting earnings. The approved tariff increase is expected to mitigate the impact of macroeconomic conditions, supporting the company’s profitability.
MTN Nigeria’s path to recovery includes strategies to strengthen its financial position, such as raising additional capital. Recently, the company announced the successful issuance of commercial papers, raising ₦42.20 billion on January 17.
“In the first nine months of 2024, we sustained growth in our operational performance, driven by our resilient business model and operational flexibility, despite challenging circumstances,” stated Karl Toriola, CEO of MTN Nigeria, in the Q3 2024 earnings report.