ABUJA, Nigeria (VOICE OF NAIJA)-MTN Nigeria posted a profit after tax of N355.5bn for the first quarter of 2026, representing a 165.9 per cent year-on-year increase, but cautioned that rising energy costs could pressure earnings in subsequent quarters.
In its unaudited results released on Wednesday, the telecom operator projected a 1.8 to 2.0 percentage point drop in full-year Earnings Before Interest, Taxes, Depreciation and Amortisation margins if diesel prices average N2,000 per litre in the second half of the year.
The country’s largest telecom operator, with 89.5 million subscribers, runs over 20,000 base stations nationwide, most of which rely on diesel generators due to unreliable grid power.
“We continue to monitor developments in the operating environment, including energy price volatility and regulatory dynamics,” Chief Executive Officer Karl Toriola said in the Q1 report.
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The warning comes amid heightened volatility in Nigeria’s fuel market driven by global crude oil disruptions and domestic supply constraints.
In March, tensions involving the United States, Israel, and Iran disrupted activities around the Strait of Hormuz, pushing crude oil prices above $100 per barrel and increasing fuel import costs worldwide.
This impact has filtered into Nigeria’s deregulated downstream sector, resulting in higher pump prices across the country.
The $20bn Dangote Refinery adjusted its diesel price to N1,750 per litre from N1,800, while prices at independent stations reportedly rose to about N1,250 per litre in some states.
“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,” the executive added.
According to the State of Africa’s Infrastructure Report 2025 by the Africa Finance Corporation, telecom operators in Nigeria consume more than 40 million litres of diesel monthly to power base stations across the country.
This dependence stems from persistent grid instability, making self-generation the primary energy source for network operations.
Annually, this amounts to over 480 million litres of diesel consumption, with industry estimates placing total spending above $350m.
MTN also significantly increased its investment spending during the period, with capital expenditure (excluding right-of-use assets) rising by 92.8 per cent year-on-year to N390.3bn from N202.4bn in Q1 2025.
The company said a large portion of this investment was channelled into expanding network capacity and strengthening its fixed broadband footprint, particularly through fibre-to-the-home deployment and fixed wireless access infrastructure.