Onome Amuge
MTN Nigeria Communications Plc is on track to resume dividend payments in the 2025 financial year, according to a new report by analysts at CardinalStone. The forecast is supported by a strong earnings recovery and notable improvements in the company’s balance sheet.
In a research note titled “Positive outlook affirmed for telco bellwether,” published on August 5, CardinalStone highlighted MTN’s strong second-quarter performance as a key driver of this optimism. The telecom giant, which last paid a dividend in 2023, saw its negative equity shrink from N458 billion at the end of 2024 to just N42.51 billion by mid-2025. Analysts expect MTN’s equity to turn positive in the third quarter of this year, clearing a major hurdle for the resumption of shareholder payouts.
The turnaround is largely attributed to an increase in data revenue, which grew by 85.6 per cent year-on-year to N701 billion in Q2 2025. This strong top-line growth, combined with enhanced operational efficiency, has bolstered the company’s financial health.
MTN Nigeria’s management cited a more stable exchange rate and savings from renegotiated tower lease agreements as key factors behind its improved performance. The company delivered an EBITDA margin of 53.7 per cent in Q2 2025, bringing its first-half margin to 50.5 per cent, well above CardinalStone’s earlier full-year forecast of 44.5 per cent. Reflecting this, the firm has raised its full-year EBITDA margin forecast to 51.7 per cent.
This financial recovery has enabled MTN to ramp up capital investment. In the first half of 2025, capital expenditure (CAPEX) surged by 288.4 per cent year-on-year to N565.67 billion. While this pushed CAPEX intensity to 23.8% for the period, it is expected to ease to around 17.5 per cent for the remainder of the year. Looking ahead, MTN plans to invest an average of N1.34 trillion annually on CAPEX over the next five years, an investment strategy that CardinalStone believes will drive strong revenue growth of 26.8 per cent per year.
MTN’s share price has mirrored its operational recovery, delivering a year-to-date return of 140 per cent so far in 2025. The stock, which ended 2024 down 24 per cent at N200, has rebounded to its current price of N480. The rally gained momentum in the second quarter, with the shares recording a 32 per cent gain in July alone.
Based on this positive outlook, CardinalStone has issued a “Hold” rating on MTN’s stock, which is currently trading near its reference price of N480. The firm has set a target price of N526.94 for the 2025 financial year, based on a blend of valuation measures.
