MTN Nigeria’s Share Price Rises 9.87% Following Telecom Tariff Hike Approval
MTN Nigeria’s share price surged to ₦256 on Tuesday, reflecting a 9.87% increase after the Nigerian Communications Commission (NCC) approved a 50% hike in telecom tariffs. This marks a significant boost for the telecom giant, which has faced two years of financial struggles, signaling renewed investor confidence in its profitability.
The tariff hike approval, reported on December 23, 2024, and set to take effect in January 2025, has fueled optimism about MTN Nigeria’s earnings potential. Tuesday’s price jump is the highest since March 2024, when the stock traded at ₦267.80.
In contrast, rival Airtel Africa’s stock remained stable, closing at ₦2,159. This reflects the broader scope of Airtel’s valuation, which spans its operations across multiple African markets, diluting the impact of Nigeria’s tariff adjustments.
MTN Nigeria’s financial performance has been under pressure due to macroeconomic challenges, including naira devaluation and rising inflation. The company reported a loss after tax of ₦514.9 billion in the first nine months of 2024, a 59.2% decline compared to the same period in 2023. Despite these setbacks, the company’s Q3 2024 earnings report highlighted its resilience and efforts to maintain operational growth.
The approved tariff hike is expected to ease the impact of Nigeria’s challenging economic conditions on MTN’s bottom line. The company has also taken steps to strengthen its balance sheet, raising an additional ₦42.20 billion through a commercial paper issuance in January 2025 to bolster its capital base.
“In the first nine months of 2024, we sustained growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions,” said MTN Nigeria CEO Karl Toriola in the Q3 2024 earnings report. As MTN Nigeria continues its recovery efforts, the tariff hike represents a pivotal step toward restoring profitability and navigating the complex economic landscape. Investors are watching closely to see if the company’s strategies will deliver sustained growth in the coming quarters.
