MTN Nigeria profit jumps 165.9% to N355.5bn, flags diesel cost risk

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By Boluwatife Oshadiya

Key Points

• MTN Nigeria reports N355.5bn profit after tax in Q1 2026
• Earnings surge 165.9% year-on-year
• Diesel price volatility threatens future margins
• Telco warns of up to 2.0 percentage point EBITDA margin decline
• Capital expenditure rises sharply to N390.3bn

Main Story

MTN Nigeria has reported a strong financial performance for the first quarter of 2026, posting a profit after tax of N355.5 billion, representing a 165.9 per cent increase year-on-year, despite growing concerns over rising energy costs.

In its unaudited financial results released Wednesday, the telecommunications giant warned that escalating diesel prices could significantly pressure earnings in the coming quarters. The company projected that if diesel prices average N2,000 per litre in the second half of 2026, its full-year EBITDA margin could decline by 1.8 to 2.0 percentage points.

With a subscriber base of approximately 89.5 million users and over 20,000 base stations nationwide, MTN Nigeria remains heavily dependent on diesel-powered generators due to persistent instability in Nigeria’s national grid.

Chief Executive Officer, Karl Toriola, stated that the company continues to closely monitor macroeconomic and regulatory conditions impact ing operations.

“We continue to monitor developments in the operating environment, including energy price volatility and regulatory dynamics,” Toriola said.

The warning comes amid heightened volatility in global and domestic energy markets. Geopolitical tensions involving the United States, Israel, and Iran have disrupted oil supply routes, particularly around the Strait of Hormuz, pushing crude oil prices above $100 per barrel and increasing global fuel costs.

This has had a direct impact on Nigeria’s deregulated downstream sector, where diesel and petrol prices have surged in recent months. Industry data indicates that telecom operators in Nigeria consume over 40 million litres of diesel monthly, translating to more than 480 million litres annually, with estimated sector-wide spending exceeding $350 million.

Investment and Expansion Drive

Despite cost pressures, MTN Nigeria significantly ramped up its capital investment during the period. Capital expenditure—excluding right-of-use assets—rose 92.8 per cent year-on-year to N390.3 billion, up from N202.4 billion in Q1 2025.

The company disclosed that a substantial portion of the investment was directed toward:

• Expanding network capacity
• Enhancing service quality
• Accelerating fibre-to-the-home rollout
• Strengthening fixed wireless access infrastructure

These investments are part of MTN’s broader strategy to deepen broadband penetration and improve digital connectivity across Nigeria.

What’s Being Said

Industry analysts note that while MTN’s earnings growth reflects strong demand for data and digital services, energy costs remain a structural risk for telecom operators operating in Nigeria.

The reliance on diesel-powered infrastructure continues to expose the sector to global oil price fluctuations, making cost predictability difficult in a volatile geopolitical climate.

What’s Next

Going forward, MTN Nigeria is expected to:

• Explore energy efficiency initiatives and alternative power solutions
• Continue aggressive network expansion to sustain subscriber growth
• Navigate regulatory and macroeconomic uncertainties

However, sustained increases in diesel prices could erode profitability if not offset by pricing strategies or operational efficiencies.