…Cadbury, Unilever, NASCON join list of payers
MTN Nigeria, Nigerian Breweries and Guinness Nigeria are on track to resume dividend payments by the end of 2025 as pressure eases after years of balance sheet strain.
Cadbury Nigeria Plc and Nascon Allied Industries are also among the firms likely to pay dividends by the end of the year.
The shift signals the end of a prolonged dividend drought when many listed firms – hit by President Tinubu’s reform shocks – could not pay dividends due to negative retained earnings or poor performance.
The dividend freeze, which began in 2022, was rooted in macroeconomic headwinds that impacted Nigerian firms in the past years.
The corporate Nigeria has been hard hit by the persistent naira devaluations, which translated into massive foreign exchange (FX) losses for firms dependent on the import of inputs.
This is coupled with high inflation which has remained at 20 percent or more since August 2022, according to the National Bureau of Statistics (NBS).
Rising interest rates have also inflated financing costs, while subsidy removals triggered higher logistics and energy bills.
Although many firms remained profitable at the operating level, non-cash translation losses and impairments eroded retained earnings, leaving distributable reserves in the red.
Under Nigerian corporate law, companies with negative retained earnings cannot declare dividends, regardless of their cash position. This has left many firms unable to meet investor expectations in the last two or three years , creating frustration among shareholders accustomed to steady payouts.
Analysts’ view
While board approvals will begin by 2026 with full-year numbers, various analysts said companies will likely restore dividends in the first quarter (Q1) or second quarter (Q2) of 2026, based on the end of 2025 results.
Adebayo Adebanjo, equity research analyst at Lagos-based consultancy CardinalStone, said a significant number of fast-moving consumer good (FMCG) companies will unlikely resume dividend payments immediately as they are still carrying negative equity positions or just returning to profitability.
“However, those that do not have negative retained earnings are more likely to pay dividends this year. This is a very prudent approach in our view and supports long-term stability,” he added.
Why MTN Nigeria, Nascon, others may pay
MTN Nigeria, which suspended dividend payments in 2022, is showing signs of recovery as FX losses and accumulated deficits ease. The company’s FX position improved to a negative N192.8 billion in the first half (H1) of the year, compared with N727.1 billion in the same period last year. This turnaround helped MTN post a profit of N414 billion in the H1 of 2025 as pressure on its balance sheet reduced.
According to a report from CardinalStone Research, MTNN last paid a dividend two years ago. However, the significantly improved earnings profile indicates the likelihood of a resumption of dividend payment in the current financial year.
“Equity position, which currently sits at negative N42.51 billion as of H1’25 (vs negative N458.01 billion in FY’24), is likely to turn positive by Q3’25. MTNN’s track record of maintaining robust payout ratios, coupled with recent comments from MTN Group President Ralph Mupita regarding a potential public offer post-dividend resumption, suggests that a cash distribution is likely this year,” the report disclosed.
Nascon Allied Industries, which last paid dividends in 2023, also has the potential to pay dividends this year, analysts say.
In the six months ended June 30, 2025, the company reported a 222 percent year-on-year growth in profit after tax to N15.6 billion from N5 billion, while retained earnings grew to N51.4 billion from N30.5 billion.
Analysts at Cordros Securities said, “We forecast a DPS of NGN6.87 for 2025E, equating to a dividend yield of 7.6 percent based on the current price (NGN90.50/s).”
Other consumer goods companies, such as Cadbury Nigeria Plc, Guinness Nigeria, and Nigerian Breweries, last paid dividends in 2022. However, with profitability rising and retained earnings pressure easing, this indicates a positive outlook for dividend payments.
Unilever Nigeria, a consumer goods firm, in a notice, disclosed that this is the first time in over two decades that it has declared an interim dividend, underscoring a strong financial position and renewed growth momentum.
“The company’s board has announced an interim dividend of N0.50k per 50 kobo ordinary share, subject to applicable withholding tax, and it would be paid to shareholders whose names appear on the Register of Members as at close of business on 8 August 2025. The total interim dividend payable amounts to N2.87 billion,” it said.
Nestle held its dividend steady for four years until 2022. But FX and interest-driven losses took hold in 2023, when it reported a N79 billion loss after tax, swelling to N165 billion in 2024. That pushed equity to -N92.3 billion and retained losses to N243 billion by year-end.
The H1 of 2025 saw a marked recovery. Retained losses dropped to N193 billion, equity improved to negative N42 billion, while FX losses of N262 billion in 2024 flipped to a N3 billion gain.
If this trend continues, Nestlé could edge back into positive equity by year-end and re-enter dividend territory for the first time in three years.
Share price implication of dividend return
The resumption of dividends has far-reaching implications for the equity market. For dividend-seeking investors, cash payouts serve as a critical signal of financial health and governance discipline.
Adebanjo, earlier quoted, said share prices in dividend-ready firms are re-rating upwards in anticipation of renewed yields.
Shares of MTN Nigeria Communications Plc (MTNN) recorded the highest return of 78.75 percent in the first half (H1) of 2025, outperforming seven others in the Premium Board league of eight companies.
This was driven by tariff hike approval by the National Communications Commission (NCC).
Consumer goods firms’ stocks, which witnessed bumper earnings results in the first quarter, drove significant gains in their share prices YTD.
FMCG firms’ profits
BusinessDay reported that five major players – Cadbury Nigeria Plc, Champion Breweries Plc, International Breweries Plc, Nestlé Nigeria Plc, and Nigerian Breweries Plc – collectively reported a combined after-tax profit of N110.9 billion, marking a sharp reversal from the N262.3 billion loss recorded in the same period of 2024.
This earnings season signals stability as FX pressure, which dampens company profitability and investor confidence, rebounds.
Tunde Abidoye, an analyst at FBNQuest Merchant Bank, said that with the naira more stable than it was last year, companies are less likely to incur significant losses and more likely to report profits.
Year-to-date, the NGX consumer goods index increased by 84.36 percent.
This implies that if they resume with payouts, they could see improved investor sentiment, particularly among retail investors who prize dividend income as a hedge against inflation.
Firms’ unlikely to pay
Dangote Sugar last paid a final dividend of N1.50 in December 2022. The company has been on a straight loss since 2023. In the H1 of 2025, its loss fell to N24 billion from N144 billion reported in the same period of 2024. This company is likely not to pay dividends till it can report profit.
Other companies that may not pay dividends include: Honeywell Flour Mill, which last paid in 2020, and McNichols Consolidated Pic, with dividends last paid in 2021.(BusinessDay)
