Rating Release
Agusto & Co. affirms the ‘Aa+’ rating assigned to MTN Nigeria Communications PLC, with a negative outlook
The rating expires on 30 June 2025.
Agusto & Co. hereby affirms the “Aa+” rating assigned to MTN Nigeria Communications PLC (“MTN Nigeria” or “the Company”). The affirmed rating is supported by the Company’s strong cash flow and liquidity profiles, mainly bolstered by its favourable trade terms with customers and suppliers and moderate leverage metrics. In affirming the rating, Agusto & Co. also considered MTN Nigeria Communication PLC’s dominant position in the domestic telecoms market evidenced by active mobile and data subscribers of 77.7 million and 44.6 million respectively as at 31 March 2024, increased investments in its network infrastructure, rising broadband penetration, a broad range of spectrum licenses supporting its ongoing 4G and 5G expansion and a stable, qualified and experienced management team. Notwithstanding, the affirmed rating is constrained by the stringent regulatory environment in the Nigerian Telecommunications Industry that significantly limits the Company’s ability to implement cost-reflective tariff adjustments on its service offerings, resulting in considerable downward pressures on profit margins. The rating is also moderated by MTN Nigeria’s negative shareholders’ funds and declining profitability metrics amid the significant post-tax losses reported in 2023 and Q1’2024 and the adverse impact of the prevailing macroeconomic headwinds on its business.