…MTN Nigeria Projected to Declare ₦59.81 Full-Year Dividend Following Record Interim
Equity research analysts at CardinalStone Partners have maintained a “BUY” rating on MTN Nigeria Communications Plc (NGX: MTNN), adjusting their 12-month target price slightly to ₦1,002.49 per share (from ₦1,011.63 previously).
The revised valuation implies a 24.5% capital upside from a reference price of ₦805.00, yielding a projected total return of 32.0% when combined with an anticipated 7.4% dividend yield.
Despite near-term revenue friction during H1 2026—caused by temporary disruptions to value-added service (VAS) airtime/data credit channels, softer voice traffic, and slower conversion of new subscribers into data users—CardinalStone projects a revenue recovery in H2 2026 backed by resilient data demand and expanding usage volumes.
Operating Margins Benefit from Tax Act Relief and Energy Locking
MTN Nigeria posted a blended EBITDA margin of 55.9% in H1 2026 (up ~5.3 percentage points YoY), supported by:
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Tax Act Relief: Claims on input Value Added Tax (VAT) under the Nigeria Tax Act 2025 (effective January 1, 2026).
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Cost Disciplines: Structural cost-efficiency programs, including reduced USD-indexed contracts, CPI caps on supplier leases, embedded vendor discounts, and locking in diesel/energy costs for leased tower sites a quarter in advance.
H2 2026 Margin Outlook
For H2 2026, CardinalStone expects the EBITDA margin to moderate slightly to 54.6% (down 1.3 percentage points from H1). This adjustment incorporates management’s guidance on diesel sensitivity, which models a 1.8–2.0 percentage point margin drop if ex-depot diesel prices rise toward ₦2,000/litre.
Cash Generation & Dividend Trajectory
MTN Nigeria generated ₦1.5 trillion in operating cash flow during H1 2026, underpinned by an EBITDA of ₦1.7 trillion. For the full year 2026, CardinalStone projects:
EBITDA: ₦3.60 trillion (+30.6% YoY growth).
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Operating Cash Flow: ₦2.50 trillion, supported by moderating capital expenditure intensity.
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Shareholder Distributions: Following the record ₦26.00 per share interim dividend, CardinalStone forecasts a final dividend of ₦33.81 per share, bringing the total FY2026 dividend payout to ₦59.81 per share.
Valuation Model Assumptions
The slight reduction in CardinalStone’s 12-month target price (from ₦1,011.63 to ₦1,002.49) reflects downward top-line growth adjustments offset by higher operating margin expectations and macroeconomic discount rate recalibrations:
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Risk-Free Rate (): Adjusted upward to 17.0% (vs. 16.2% previously) to reflect higher benchmark sovereign bond yields.
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Equity Risk Premium (ERP): Adjusted downward to 12.2% (vs. 12.6% previously).
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Net Impact: The higher risk-free rate exerted net upward pressure on MTN Nigeria’s Cost of Equity (), moderating the discounted cash flow (DCF) equity value while preserving a strong fundamental ‘BUY’ case.
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