MTN Nigeria Communications Plc (NGX: MTNN) appears to be on track to recovery, evinced by its positive bottom-line print of N114.5 billion for Q4'24 (vs loss of N514.9 billion in 9M'24). We attribute this positive result to 1.) the successful renegotiation of tower lease contracts that resulted in N113.8 billion in OPEX savings; 2.) the focus on expense efficiency, which has yielded OPEX savings of N41.9 billion; and 3.) the continued increases in both usage and subscriber base in its voice and data businesses.
In 2025, we expect MTNN to continue its recovery course, supported by the recent tariff increase (i.e., at most 50.0% across the sector), improved macroeconomic conditions, a significant reduction in foreign currency letters of credit obligations ($20.8 million as of FY'24 vs. $416.6 million in 2023), and a value-based capital allocation.
