March 9, 2025
MTN Nigeria, MTNN, latest financial performance, have been assessed by some financial analysts examining the company’s revenue growth, challenges, FX losses, negative retained earnings, and investor concerns.
The analysts noted that despite MTNN’s robust revenue growth, the company’s struggles at the bottom line.
Some said, “MTNN did well topline with over N3.3 trillion in revenue, up from N2.4 trillion in 2023, but recorded a massive bottom-line loss of over N400 billion compared to N138 billion losses in 2023.”
However, the company managed to post a profit in Q4, but the debate remains on whether this signals a full recovery or if there are more challenges to confront.
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Another analyst, pointed out that MTNN was effective in restructuring its cost base, particularly its dollar-denominated expenses. “The renegotiation of dollar operating expenses from 45% to 20% was a major win, which played a role in the Q4 recovery,” he noted.
However, a portion of this improvement was countered by a fellow analyst who felt it may have been overstated due to a dollar-related repayment that inflated the EBITDA margin. “When adjusted, the EBITDA margin was closer to 41% instead of the reported 46%.”
It was noted that MTNN over the past year lacked clarity on the sources of its FX losses, but it was however acknowledged that Q4 results provided better insight.
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MTNN’s negative retained earnings of N607.5 billion and negative shareholders’ funds of N458 billion, is one of the key issues weighing on investor sentiment. The figures mean that, legally, the company might not be able to pay dividends until these losses are settled.
It was observed that the concerns over dividend payments have prevented the market from fully pricing in MTNN’s recent improvements.
Analyst emphasized that for a full recovery, MTNN would need at least two years of N1 trillion in back-to-back profits and provided more immediate projection, stating, “With Q4 PAT of N114.5 billion, an annualized growth of 40% would yield about N500 billion in 2025. The company does not need massive, retained earnings, just a return to positive retained earnings to pay dividend.”
Analysts, in their projections identified several factors that could influence MTNN’s performance.
While the hike in tariff could boost revenue, it may also impact subscriber usage patterns.
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The worst of the subscriber losses over the NIN-SIM deregistration impact may be over, which could stabilize revenue growth.
Investors will likely remain cautious due to market sentiment until the company showed a clear and sustained return to profitability.
Considering analysts’ recommendations, there is a strong prospect towards a buy for MTNN.
Despite MTNN’s challenges, including FX losses and negative retained earnings, analysts recognize the company’s ability to generate strong cash flows and its improving financial performance.
