Nigeria and Ghana power MTN rebound as cash flows back to Johannesburg

The Johannesburg-based MTN Group received R13.9bn ($830m) in cash from its operating companies during the six months to June, up from R8.2bn a year earlier. Ghana provided R6.6bn and Nigeria R2.7bn, together accounting for 67% of the total. South Africa contributed R2.1bn. This underlines the growing importance of West Africa to the telecoms giant as its home market struggles for growth.

The improved cash generation came alongside strong group results. Service revenue rose 17.5% in constant currency to R115.3bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased 24.4% to R56bn. The EBITDA margin widened by 3.1 percentage points to 47.6% on the same basis. Adjusted headline earnings per share (HEPS) rose 21.3% to 793 cents.

“The strength of our broader portfolio remained evident, helping to offset temporary headwinds in individual markets,” says Ralph Mupita, MTN Group president and chief executive.

But the headline group figures conceal a widening gap between MTN’s biggest markets. Nigeria has returned to being a major source of earnings and cash after years of currency and inflation shocks, while Ghana continues to deliver some of the group’s highest margins. South Africa, by contrast, is increasingly the mature business in the portfolio.

Nigeria comes back

The sharpest turnaround has been in Nigeria, historically one of MTN’s biggest sources of both growth and risk. MTN Nigeria’s service revenue rose 25.7% in constant currency in the first half, while EBITDA climbed 38.7% to R19.9bn. Its EBITDA margin widened by 5.3 percentage points to 55.9%. Data revenue increased 38.2%.

The performance marks a further recovery from the currency crisis that battered MTN’s Nigerian balance sheet after the naira was allowed to depreciate sharply from 2023. Tariff increases approved in 2025, alongside cost reductions and changes to tower contracts, have since helped restore profitability and cash generation.

Not all the growth is organic, however. Service revenue growth slowed from 41.7% in the first quarter to 13.2% in the second as last year’s price increases entered the comparative base. MTN also temporarily suspended its airtime advance service, which reduced the eligible customer base and dragged on fintech revenue.

That makes the durability of the Nigerian recovery an important question for investors.

“While there are some structural changes to the foreign exchange market and the Dangote Refineryhelping to preserve forex reserves, macro and regulatory risks remain, and the continued ability to raise prices will be key for a quicker recovery from any macro headwinds,” Peter Takaendesa, chief investment officer at Mergence Investment Managers, tells The Africa Report.

Ghana’s cash machine

If Nigeria is MTN’s turnaround story, Ghana is its most striking example of sustained high-margin growth. Service revenue at MTN Ghana increased 32.3% in constant currency, driven particularly by data and fintech. Data revenue rose 47.3%, while fintech revenue increased 23.7%. EBITDA climbed 40% to R13.7bn, and its margin reached nearly 62%.

Mobile Money remains central to the business, contributing 23.4% of Ghanaian service revenue. The operation also completed the structural separation of its fintech business during the first quarter, part of MTN’s wider effort to create greater value from its mobile-money operations.

Yet Ghana’s significance to the parent company is clearest in cash rather than revenue. Its R6.6bn contribution accounted for nearly half of all cash upstreamed to MTN Group – three times the amount sent by South Africa.

South Africa falls behind

MTN’s home market moved in the opposite direction. South African service revenue increased just 1.5% to R21.9bn, while EBITDA fell 7.7% to R8.5bn. Its EBITDA margin contracted by 2.2 percentage points to 34.3%. The subscriber base fell 0.7% to 39.5 million, largely because of losses in prepaid, although MTN says it has deliberately focused on improving the quality rather than the size of the customer base.

The picture is not uniformly weak: postpaid, enterprise and wholesale revenue continued to grow. But the prepaid operation remains under pressure from intense competition and constrained consumer spending.

Takaendesa says that this changes the role the South African business needs to play within the wider group. “South Africa should largely be managed as a cash cow to fund the balance-sheet de-gearing post the IHS acquisition and also act as an anchor to the group’s cash return ambitions in case of rest of Africa macro headwinds returning,” he adds.

“Key for SA operations will be at least avoiding further market share loss and a disciplined ongoing cost optimisation programme.”

Cash heads back to shareholders

The stronger flow of cash from MTN’s African subsidiaries is also giving management greater room to reward shareholders.

The board confirmed that it will begin implementing a share buyback of up to R6bn ($6.24m) after the current closed period ends. The programme forms part of a capital-allocation framework announced earlier this year under which MTN aims to return 40%-60% of equity free cash flow to shareholders through dividends and buybacks.

Reported headline earnings per share fell 5.8% to 615 cents, largely because of non-operational items including an impairment of MTN’s 49% stake in Irancell and foreign-exchange losses, particularly in South Sudan. MTN’s preferred measure of underlying performance, adjusted HEPS, rose 21.3% to 793 cents.

Group net debt remained at just 0.3 times EBITDA, while MTN reported R39.1bn of liquidity headroom.

Doubling down on Africa’s towers

That balance-sheet strength will be tested by MTN’s biggest strategic move in years: its planned acquisition of the roughly 75% of tower operator IHS Holdings that it does not already own. The $2.2bn deal would bring almost 29,000 African towers under MTN’s control and allow it to internalise margins currently paid to IHS, gain third-party tower revenues and improve cost predictability.

MTN is targeting completion in the second half of 2026, although regulatory approvals remain outstanding. Nigeria’s Federal Competition and Consumer Protection Commission has given conditional approval, requiring MTN to sell down up to 30% of the Nigerian component of IHS over time.

The acquisition therefore sharpens the strategic bet revealed by MTN’s first-half numbers. The group is becoming more dependent on the African markets that offer its highest growth – while increasing its direct exposure to their currencies, regulators and economic cycles.

“MTN has set digital infrastructure as one of the three pillars of its long-term strategy, and IHS fits into that,” Takaendesa said. “It comes with higher risk as it increases their exposure to macro and regulatory risks, but it also gives them better operational flexibility and long-term monetisation options without the complications that affected the IHS investment case as a listed entity.” (The Africa Report)