A transitionary fintech issue in Nigeria

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MTN Group

A transitionary fintech issue in Nigeria

Reiterate Rating: BUY | PO: 253.00 ZAR | Price: 204.97 ZAR

Attractive opportunity as 2H26 growth set to reaccelerate

03 August 2026

MTN shares fell 10.5% on 31 July as 1) MTN Nigeria revenue missed consensus by 12%

2) management provided limited visibility on the pace of recovery towards 20%+ (midterm guidance) during the earnings call 3) the slowdown was not flagged during MTN’s

CMD (June 10/11). We think the issue is transitionary (tough comps + suspension of

airtime advance products now resumed) and expect a gradual recovery in growth to

21.5% by 4Q26. As a result, our bullish view remains intact and we reiterate Buy.

However, we cut our DCF based PO to ZAR253 from ZAR260, reflecting a 4/3%

reduction in 26/27E HEPS forecasts driven by a more gradual recovery in MTN Nigeria

to our base-case growth assumptions. MTN Group reports full results on August 24.

We’d expect a firmer message on Nigeria.

Equity

Facts: what really concerned the market

MTN Nigeria Y/Y revenue growth decelerated by 28.7 p.p to 13.2% versus 1Q26 and was

flat QoQ whereas it increased 2-5% QOQ in 2Q22/23/24. The Y/Y drop was driven by a

72% decrease in Fintech revenue as MTN Nigeria pulled its XtraTime product in April

2026. Such product allows subscribers (all prepaid in Nigeria) to top up their balance on

credit and contributes 15%+ to airtime sales which impacted revenue by 3-7% (BofAe)

Y/Y comps were tough with 2Q25 revenue growing 68% Y/Y as MTN Nigeria enjoyed the

full impact of price hikes implemented in 1Q25. On a positive note, there was no

operating deleverage – i.e. even with revenue growth slowing down Y/Y, EBITDA margin

still expanded by 279bps Y/Y to 56.5%. EBITDA margin did also not decline QoQ

(+126bps) despite the flat QoQ revenue highlighting a solid execution on cost control.

We think the issue is transitionary not structural

2024A

8.14

-29.7%

2025A

13.6

66.9%

3.45

25.2x

0x

(ZAR)

Previous

Price Obj.

260.00

Current

253.00

2026E Rev (m)

257,441.8

254,137.3

2027E Rev (m)

309,445.2

304,054.9

2028E Rev (m)

375,415.5

365,198.5

2026E EPS

16.06

15.36

2027E EPS

23.56

22.76

2028E EPS

32.02

30.14

Cesar Tiron >>

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