By Mary Onyia
Shareholders of MTN Nigeria Communications Plc have seen their investment increase by 67.7 percent since the start of the year, as the telecommunications giant reported a significant 70.5 percent rise in profit after tax to N707.54 billion in the first half of 2026.
The company’s strong earnings, along with improved investor sentiment, increased its share price from N511.00 at the end of December 2025 to N857.10 on July 30, 2026, resulting in a capital gain of about N346.10 per share.
The sharp increase in the share price reflects a significant recovery in MTN Nigeria’s financial performance, as the company has overcome some of the severe foreign-exchange and cost pressures that had heavily impacted its earnings in previous periods.
MTN Nigeria’s revenue also approached the N3 trillion mark during the six months ended June 30, 2026, rising by 25.9 per cent from N2.38 trillion in H1 2025 to N2.99 trillion.
The combination of stronger revenue, improved foreign-exchange earnings, higher finance income, and lower finance costs helped drive the company’s profit before tax up by 75.4 per cent to N1.09 trillion, compared with N622.26 billion in the corresponding period of 2025.
Operating profit equally increased by 41.8 per cent from N892.82 billion to N1.27 trillion, while earnings per share rose substantially from N19.80 to N33.76.
The latest results, therefore, suggest that MTN Nigeria has moved beyond the worst effects of the currency-related disruptions that significantly affected its financial performance and is now rebuilding a stronger earnings base.
FX turnaround boosts earnings
One of the most significant improvements in the H1 2026 results was the company’s foreign-exchange position.
MTN Nigeria recorded a net foreign-exchange gain of N36.36 billion during the period, compared with a net foreign-exchange loss of N5.23 billion in H1 2025.
The N41.59 billion positive swing provided a significant boost to the company’s bottom line at a time when currency volatility remains a major risk for businesses with substantial foreign-currency-linked obligations.
Finance income also rose sharply, increasing from N14.41 billion to N46.80 billion, representing an increase of more than 200 per cent.
At the same time, finance costs declined by 7.7 per cent from N279.75 billion to N258.13 billion.
The combination of higher finance income, lower finance costs, and the turnaround from an FX loss to an FX gain significantly strengthened profit before tax.
Costs remain a major concern
Despite the impressive earnings growth, MTN Nigeria’s cost profile remains a major area of concern.
Employee costs increased dramatically from N54.68 billion in H1 2025 to N135.65 billion in H1 2026, representing an increase of about 148 per cent.
Depreciation of property and equipment also climbed from N140.73 billion to N218.85 billion, while depreciation of right-of-use assets increased from N126.65 billion to N140.44 billion.
Amortisation of intangible assets rose from N42.03 billion to N47.67 billion.
The company also spent substantially more on market-related activities.
Advertising, sponsorships, and sales promotions increased by about 70.4 per cent from N20.61 billion to N35.12 billion, while commissions rose 29.9 per cent to N142.75 billion.
Impairment losses on financial assets increased significantly as well, rising from N3.11 billion to N16.59 billion.
These increases underline the difficult cost environment confronting telecom operators in Nigeria, particularly as network expansion, energy, labour, infrastructure, and maintenance expenses continue to rise.
Yet, despite the pressure, MTN Nigeria managed to expand operating profit significantly, suggesting that revenue growth and operating leverage were strong enough to absorb much of the additional cost burden.
Heavy investment in network infrastructure
The company’s balance sheet reflects an aggressive investment programme.
Total assets increased from N5.40 trillion at December 2025 to N5.97 trillion by June 2026.
Property, plant, and equipment rose from N1.85 trillion to N2.22 trillion, reflecting continued investment in network infrastructure, technology, and capacity.
The scale of the investment is evident in the cash-flow statement. MTN Nigeria spent N763.85 billion on the acquisition of property and equipment during the six months, more than double the N382.47 billion invested in H1 2025.
It also invested N31.23 billion in intangible assets and N5.99 billion in right-of-use assets.
The spending demonstrates the enormous capital requirements of Nigeria’s telecommunications industry, where operators must continuously invest in network capacity to meet rapidly growing demand for data and digital services.
Operating cash flow provides relief
While capital expenditure was substantial, MTN Nigeria generated significantly more cash from its core operations.
Net cash generated from operating activities rose by about 60.6 per cent to N1.53 trillion from N955.68 billion in H1 2025.
The strong operating cash flow provides the company with a considerably stronger internal funding base for its network expansion programme.
However, the company’s investment and financing commitments continued to put pressure on liquidity.
Investing activities absorbed N1.11 trillion during the period, while financing activities consumed another N597.71 billion.
Consequently, MTN Nigeria recorded a net decrease of N170.80 billion in cash and cash equivalents during the six months, compared with a marginal increase of N1.97 billion in H1 2025.
Cash and cash equivalents consequently declined from N632.50 billion at the end of December 2025 to N458.93 billion at June 30, 2026.
The company also paid N314.59 billion in dividends during the period, demonstrating its continued commitment to rewarding shareholders even as it pursues an aggressive investment programme.
Debt declines, lease obligations remain high
MTN Nigeria nevertheless made progress in reducing conventional borrowings.
Non-current borrowings fell from N419.57 billion at December 2025 to N262.37 billion by June 2026, while current borrowings declined from N108.10 billion to N80.23 billion.
However, lease liabilities remained substantial at N2.44 trillion, consisting of N2.11 trillion in non-current lease liabilities and N328.37 billion in current lease liabilities.
Total liabilities consequently increased from N4.85 trillion at December 2025 to N5.04 trillion at June 2026.
The company’s improved profitability, however, substantially strengthened its equity position.
Group shareholders’ equity increased from N548.71 billion at the end of 2025 to N930.61 billion by June 2026.
Retained profit almost doubled from N400.40 billion to N793.07 billion, despite the payment of N314.59 billion in dividends.
Investors reward stronger earnings
The market’s response to the results has been equally significant.
MTN Nigeria’s share price appreciated from N511.00 on December 31, 2025, to N857.10 on July 30, 2026, giving investors a year-to-date capital gain of approximately 67.7 per cent.
The gain suggests that investors are increasingly pricing in the company’s improved earnings capacity, stronger cash generation, and prospects for sustained revenue growth.
For shareholders, the combination of capital appreciation and dividend payments has strengthened the overall investment proposition.
The share price performance also reflects growing confidence that MTN Nigeria has successfully navigated some of the most difficult effects of the naira depreciation and is now entering a period of stronger financial stability.
The challenge ahead
Despite the impressive numbers, MTN Nigeria faces an important challenge: sustaining earnings growth while funding the enormous investment required to support Nigeria’s rapidly expanding digital economy.
The N763.85 billion spent on property and equipment in only six months illustrates the capital-intensive nature of the business.
Revenue growth will therefore need to continue outpacing the cost of maintaining and expanding the network if the company is to translate its current recovery into sustainable free cash flow.
For now, however, the numbers are strongly in MTN Nigeria’s favour.
Revenue has climbed to nearly N3 trillion in six months, operating profit has crossed N1.2 trillion, profit before tax has exceeded N1 trillion, and profit after tax has reached N707.54 billion.
More importantly, operating cash flow has risen to N1.53 trillion, giving the company greater capacity to finance its expansion from internally generated funds.
For shareholders, the story has been even more rewarding. A 67.7 per cent year-to-date increase in the share price represents a substantial recovery in market value, coming alongside the company’s improved profitability.
MTN Nigeria’s H1 2026 performance, therefore, marks a significant turnaround in both earnings and investor confidence.
The bigger test now is whether the company can sustain this momentum, convert stronger earnings into stronger free cash flow, manage its rising operating costs, and continue investing sufficiently in its network without putting excessive pressure on liquidity.
If it succeeds, the current recovery could mark the beginning of a more durable phase of growth for MTN Nigeria—and potentially further gains for its shareholders.