Rating Release

Agusto & Co. hereby affirms the “Aa+” rating assigned to MTN Nigeria Communications PLC

The rating expires on 30 June 2024.

Agusto & Co. hereby affirms the “Aa+” rating assigned to MTN Nigeria Communications PLC (“MTN Nigeria”, “MTNN”, “MTN” or “the Company”). The rating affirmation is supported by the Company’s very good and sustainable profitability level, strong cash flow, moderate leverage metrics and adequate working capital position. The rating underpins the Company’s dominant position in the Nigerian Telecommunications Industry evidenced by active mobile and data subscribers of 77.1 million and 41 million respectively, a broad range of spectrum licenses supporting its ongoing 4G expansion and 5G rollouts, a good corporate governance framework, and a stable, qualified and experienced management team. The rating is further strengthened by MTN’s growing Financial Technology (FinTech) segment (MoMo Payment Service Bank), with 22 million users and 3.1 million active wallets, which we expect to be a major contributor to the Company’s financial performance in the medium term. Nevertheless, the rating is constrained by the foreign exchange risks, which we expect to weigh on profitability in the near term, prevailing macroeconomic headwinds in the country that continue to limit MTN Nigeria’s ability to effectively pass on cost increases to customers, increasing competition in the data segment and a stringent regulatory environment.

MTN Nigeria is a member of the MTN Group (“the Group”) – one of Africa’s leading telecommunications companies, with a presence in 19 countries in Africa and the Middle East and a subscriber base of 289 million as at the end of 2022 (2021: 272 million). MTN enjoys strong technical support from MTN Group and has a dominant operator status in Nigeria, controlling more than 40% of the Nigerian Telecommunications industry’s market share (voice and data). In addition, MTNN launched its MoMo Payment Service Bank operations in May 2022 following the Central Bank of Nigeria’s approval.

The opinions expressed in this rating release do not represent any investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.