MTN profit hits N355.5bn, as diesel cost threatens outlook

MTN Nigeria's latest financial results paint a picture of robust growth, with a striking 165.9% surge in profit after tax for the first quarter of 2026, hitting N355.5bn. This impressive performance, however, is tempered by a significant concern looming over the horizon: the escalating cost of diesel. As Nigeria's largest telco, operating over 20,000 base stations, a substantial portion of which rely on diesel generators due to unreliable grid power, the company is particularly vulnerable to energy price volatility.

CEO Karl Toriola's cautionary note about a potential 1.8 to 2.0 percentage point decline in full-year EBITDA margins, should diesel prices average N2,000 per litre in the second half of the year, highlights the precarious balance. This warning comes at a time when global crude oil disruptions have pushed fuel import costs higher, directly impacting Nigeria's deregulated downstream sector. The price of diesel has seen a sharp increase, with reports of it nearing N1,250 per litre at independent stations and even higher at the Dangote Refinery.

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

The sheer scale of diesel consumption by the Nigerian telecom sector—over 40 million litres monthly, translating to over 480 million litres annually and exceeding $350 million in spending—underscores the gravity of this challenge. While MTN continues to invest heavily in expanding its network capacity and broadband footprint, the persistent reliance on diesel generators presents a significant operational hurdle. This situation is a stark reminder of the ongoing infrastructure deficits in Nigeria and their direct impact on businesses, even as they strive for technological advancement and growth.

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Based on an assumed average Lagos ex-depot diesel price of N2,000 in H2, we estimate a 1.8–2.0 percentage point impact on full-year EBITDA margin.