MTN Group Limited

Analyst thesis

Our recommendation is based on:

• Data and Fintech segments drive structural growth: MTN is increasingly capturing long-term growth in connectivity and financial inclusion across West and Central Africa. Data revenue prospects are supported by rising traffic and growth in active data subscribers, which now total 179 million. Fintech provides a second structural growth pillar, with MoMo monthly active users at 70.8 million and transaction value exceeding US$330 billion over the latest reporting period. The investment case centres on data, fixed and home broadband, enterprise digital services and fintech, which increase customer lifetime value and reduce reliance on the structurally declining voice revenue pool.

• Market recovery supporting earnings upside: Nigeria and Ghana are the main earnings catalysts, supported by strong data demand with improving macroeconomic and foreign exchange (FX) conditions. Continued normalisation in these markets could support further margin expansion and earnings growth. An any improvement in South African operations would provide an additional upside lever.

• Cash generation supports improved shareholder returns: MTN’s cash profile has improved, with free cash flow (FCF) conversion reaching 92.5% in the latest results. This allows capacity to continue funding network investment, execute strategic infrastructure transactions, and return capital to shareholders.

• Reported earnings remain exposed to non-operational shocks: Despite positive momentum in earnings, FX volatility, hyperinflation, geopolitical developments, and impairments can affect earnings and investor sentiment. The key valuation risk is that strong local currency operational growth does not consistently translate into predictable ZAR earnings and shareholder returns.