MTN Nigeria may resume dividend payments after 2 years- Report

MTN Nigeria is poised to resume dividend payments in 2025, ending a two-year hiatus triggered by a negative equity position, according to a recent report by CardinalStone.

The development signals a robust financial recovery and renewed investor confidence. With a rapidly improving balance sheet and strong operational performance, MTN Nigeria is poised to reclaim its position as a top dividend-paying stock on the Nigerian Stock Exchange (NGX).

The company’s financial trajectory has taken a positive turn. Its equity position, which stood at a negative N458.01 billion at the end of 2024, has significantly improved to a negative N42.51 billion by H1-2025. 

Analysts at CardinalStone forecast that MTN’s equity will turn positive by Q3 2025. This improvement is a critical step toward resuming dividend payments, as negative equity had previously constrained the company’s ability to pay dividends to shareholders.

The turnaround is attributed to several strategic moves. MTN Nigeria has capitalised on a surge in data revenue, renegotiated tower lease agreements, and benefited from a more stable exchange rate.

These factors have bolstered the company’s balance sheet, setting the stage for a potential dividend revival.

The company’s strong operational momentum, evidenced by a 53.7% EBITDA margin in Q2 2025, further supports this optimistic outlook.

Dividends are a key metric for investors, signalling a company’s financial health and commitment to shareholder value. MTN Nigeria has a track record of maintaining robust payout ratios, making its two-year dividend pause an anomaly.

The last dividend was paid in 2023, but the company’s improved earnings profile suggests a return to its dividend-paying tradition by the end of the year.

This aligns with comments from MTN Group President Ralph Mupita, who hinted at a potential public offer following the resumption of dividends, a move that could further enhance shareholder value.

The prospect of resumed dividends is particularly significant in Nigeria’s economic context. With inflation and currency volatility impacting investor returns, stable dividend-paying stocks like MTN Nigeria are highly sought after.

A dividend comeback could attract institutional and retail investors, boosting the stock’s appeal on the NGX.

Data revenue drives MTN Nigeria’s growth

A key driver of MTN Nigeria’s recovery is its booming data segment. The company has seen a surge in data revenue, fuelled by increasing demand for mobile internet services across Nigeria.

As of January 2025, the country has 169 million mobile subscriptions, according to data from the Nigerian Communication Commission (NCC). This implies that 78% of the country’s 216 million people are connected.

MTN Nigeria has strategically invested in expanding its 4G and 5G networks to meet this demand. The company deployed 700 5G sites across 13 cities by May 2023, including major hubs like Lagos and Abuja.

These investments have paid off, with data revenue contributing significantly to the company’s top-line growth. CardinalStone analysts project that MTN’s focus on data services will continue to drive revenue, supporting its ability to fund dividend payments.

Similarly, MTN Nigeria’s operational efficiency has been a cornerstone of its recovery. The company achieved a remarkable 53.7% EBITDA margin in Q2 2025, surpassing its full-year forecast of 44.5%.

This improvement reflects disciplined cost management and strategic renegotiations of tower lease agreements, which saved N113.8 billion in operating expenses. Additionally, MTN’s focus on expense efficiency yielded N41.9 billion in savings, further strengthening its financial position.

The company’s ability to navigate Nigeria’s challenging macroeconomic environment is noteworthy. A more stable exchange rate and reduced foreign currency obligations, down to $20.8 million in 2024 from $416.6 million in 2023, have alleviated financial pressures.

These factors, combined with a tariff hike of up to 50% approved by the Nigerian Communications Commission in February, position MTN Nigeria to sustain its profitability and support dividend payouts.

MTN Nigeria’s stock has staged an impressive recovery in 2025. After a challenging 2024, when the stock declined 24% to close at N200, it rebounded strongly, gaining 22.5% in Q1 2025 alone. The stock’s momentum intensified in Q2, driven by strong earnings reports and positive analyst outlooks.

CardinalStone has set a target price of N526.94 for MTN Nigeria’s stock by year-end, recommending a “Hold” rating due to its proximity to the reference price of N480.

MTN Nigeria’s focus on data growth, operational efficiency, and financial discipline positions it for sustained success. The anticipated positive equity position by Q3 2025 clears a major hurdle for dividend resumption. Investors are likely to closely monitor the company’s Q3 earnings report for confirmation of this milestone.

Additionally, Ralph Mupita’s comments about a potential public offer post-dividend resumption suggest further growth opportunities, potentially attracting more institutional investors.

The company’s potential dividend comeback in 2025 marks a watershed moment for the telecom giant and its shareholders. With a recovering balance sheet, surging data revenue, and robust operational performance, MTN Nigeria is well-positioned to reward investors. 

The telecom sector’s growth trajectory, driven by increasing broadband demand and technological advancements, further bolsters MTN’s outlook. As Nigeria’s telecom market continues to evolve, MTN Nigeria remains a bellwether, poised to deliver value to shareholders and solidify its dominance in the industry.