Treasury to book Sh7.7bn from Safaricom interim dividend


Treasury Cabinet secretary, Njuguna Ndung'u on August 9, 2023. PHOTO | BILLY OGADA | NMG

The Treasury is set for a Sh7.7 billion dividend windfall courtesy of Safaricom after the telco announced an interim payout of Sh0.55 per share.

The government holds a 35 percent stake in Safaricom, equivalent to 14.02 billion shares. Multinationals Vodacom Group Limited and Vodafone Group Plc, which jointly hold a 40 percent stake or 16 billion Safaricom shares, will earn Sh8.8 billion in interim dividends from their stake.

Retail investors owning up to 100,000 shares each will on their part share Sh648.6 million in the dividend. These investors numbered 533,172 by the end of December 2023, but only held 2.9 percent or 1.18 billion shares of the company.

The telco on Thursday announced that the Sh22.03 billion interim payout, which is related to the financial year ending March, will be paid on March 31 to shareholders on register as at March 15. The company has been making interim dividend payments since February 2021, a move it took with the encouragement of the central bank to reduce the pressure on the forex market when it went to source for bulk dollars to pay foreign investors.

Previously, shareholders received the cash distributions once —in the form of a first and final dividend— in August or September.

For the year ending March 2021, the interim dividend stood at Sh0.45 per share, before rising to Sh0.64 in 2022. The payout was then cut to Sh0.58 a share for the 2023 financial year, and further to Sh0.55 per share in the current reporting period.

The latest cut in interim dividend came after the telco’s consolidated net profit for the half year ended September 2023 fell by 10 percent to Sh27.1 billion on account of higher costs in its Ethiopia operation. The net earnings from the Kenya business grew by 13.6 percent to Sh40.6 billion.

In trading at the stock market on Thursday, the Safaricom share price remained unchanged at Sh13.40, even as the counter led the market in traded turnover at Sh255 million. This accounted for 68.7 percent of the NSE’s total traded turnover of Sh371.7 million on the day.

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