MTN Nigeria profit up 55% but cash drops 40% as dividends, capex drain reserves

MTN Nigeria reports ₦1.17 trillion profit after tax for nine months ended September 2026, up 55.3% year-on-year, with service revenue rising 23.7% to ₦4.59 trillion. Yet cash and equivalents fell nearly 40% to ₦381 billion from ₦632.5 billion in December 2025. The operator generated ₦2.31 trillion in operating cash flow but paid out ₦859.7 billion in dividends, spent ₦1 trillion on network equipment, and repaid ₦347 billion in borrowings and lease principal—outflows exceeding operating receipts.

Data remains the growth engine: revenue jumped 35.8% to ₦2.68 trillion as active data users hit 57.2 million. Total subscribers reached 94.7 million. Fintech mobile-money revenue more than doubled, though total fintech revenue fell 25.9% after earlier airtime-credit suspension. EBITDA margin widened to 56.9%, helped by 25.3% lower finance costs and an ₦80.1 billion foreign-exchange gain from naira appreciation.

The concern is shrinking financial flexibility. Net cash position narrowed to ₦47.7 billion from ₦104.8 billion. Working-capital deficit stands at ₦1.46 trillion, though contract liabilities (prepaid services) explain much of this. Lease liabilities total ₦2.46 trillion in tower commitments. Diesel prices hit ₦1,899/liter in September (up 92% since January), and energy represents 28-30% of operating costs—management warns ₦2,000/liter could shave 1.8-2 percentage points off full-year EBITDA margin.

MTN reaffirmed medium-term growth guidance, but the balancing act intensifies: fund network expansion, meet tax and lease obligations, sustain dividends, and preserve enough liquidity for shocks. For 94.7 million subscribers, the question is whether cash constraints will slow 4G/5G rollout or push tariff increases. For investors, whether the ₦859.7 billion dividend payout is sustainable if diesel stays high and the naira weakens.

SOURCE: https://techcabal.com/2026/11/02/mtn-nigeria-earns-more-but-has-less-cash/