Umeme declares Sh446m interim dividend payout to shareholders

What you need to know:

Kenyan investors who bought shares in Ugandan power distributor Umeme are set to benefit from a Sh446 million (USh13 billion) interim dividend
This is in contrast to shareholders of its Kenyan counterpart, Kenya Power, which announced that it would not be paying any dividends this year
Umeme, which is listed on both the Nairobi Securities Exchange (NSE) and the Uganda Securities Exchange said the interim dividend would be paid to investors who will be on its books as at December 9

Kenyan investors who bought shares in Ugandan power distributor Umeme are set to benefit from a Sh446 million (USh13 billion) interim dividend payout.

The company announced yesterday that shareholders will be paid a dividend of Sh0.27 (Ush8) per share by Christmas.

This is in contrast to shareholders of its Kenyan counterpart, Kenya Power, which announced that it would not be paying any dividends this year to boost its cash flow position.

“The dividend, which will be subjected to withholding tax where applicable, will be paid on December 20, 2013” said Umeme in a statement.

In June the Ugandan power firm paid a final dividend of about Sh787 million ($9.26 million) or Ush15 ($0.006) per share.

Umeme, which is listed on both the Nairobi Securities Exchange (NSE) and the Uganda Securities Exchange said the interim dividend would be paid to investors who will be on its books as at December 9.

Over-subscription

The company has Sh5.6 billion (Sh164 billion) in reserves. In August the firm reported a 53 per cent rise in half-year net profit for the period ending June 2013.

Net profit for the six months ending June 2013 stood at Sh1.6 billion (Ush47.33 billion), up from Sh1.05 billion (Ush30.96 billion).

Umeme listed on the NSE in December 2012 but has only traded once, in August. Kenyans participated during the utility provider’s initial public offer (IPO) whose results, released in November last year, showed a 36.9 per cent over-subscription.

The exact number of Kenyan investors was not known at the time but arrangers said that there was “strong demand” from local investors. The total shareholders increased to 6,471 from only seven before the IPO.

Out of the total applicants, 6,450 were East Africans. Umeme managed to raise Ush171.15 billion by selling 622.37 million shares.

Proceeds from the sale of 272.37 million shares worth Ush74.9 billion were to go towards the payment of a shareholder loan, while proceeds from the sale of the balance of 350 million shares worth Ush96.25 billion were to go to private equity fund and shareholder Actis.

Kenya Power last month announced a 5.7 per cent drop in net profit for the year to June and failed to declare a dividend for the first time since 2004.

The Kenyan Power distributor said that net profit for the period to June stood at Sh4.3 billion ($49.9 million) for the full-year ended June 2013, compared to Sh4.6 billion ($54.6 million) a year earlier.