In a series of recent disclosures, MTN Nigeria Communications Plc (MTNN) has announced proactive measures to mitigate the rising impact of FX volatility on the company’s operations. The details of this disclosure primarily involve the renegotiation of the contract terms on its various tower lease agreements held by IHS. Accordingly, management estimates that the implementation of these initiatives should have a positive passthrough to EBITDA, which suffered a material contraction of 17.4 ppts YoY to 35.6% in H1’24, forecasting a potential addition of 3-4 ppts for EBITDA margin in FY’24. We align with management’s expectations and revise our estimates to reflect potential improvements in EBITDA margin to 38.6% (vs MTN’s H1’24 annualised EBITDA of 35.6%).
