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Safaricom pays Sh24bn in final dividends early


Safaricom PLC Chief Executive Officer (CEO), Peter Ndegwa at a past event. FILE PHOTO | POOL

Safaricom has started disbursing Sh24.84 billion final dividend to shareholders two days earlier, helping boost liquidity in the economy.

Shareholders of the giant telco received their final payout on Tuesday at a rate of Sh0.62 a share, a drop of 17.33 percent compared with Sh0.75 per unit last year.

The reduced final dividend payout compared with the aggregate of Sh30.04 billion a year earlier follows a 22.2 percent decline in net profit for the full year ended March 2023.

Read: Safaricom plans to pay Sh30bn dividend August

The firm’s profit fell to Sh52.48 billion from Sh67.49 billion in the prior year, for the third year in a row, largely on the back of heavy capital investments in Ethiopia.

The National Treasury will be one of the biggest beneficiaries of the dividend windfall for its 35 percent stake in the region’s most profitable company.

The Treasury’s gross dividend pay is estimated at Sh8.69 billion for its 14.02 billion shares in the firm, a drop from Sh10.52 billion a year ago.

This will bring the total payout to Sh16.82 billion, having received Sh8.13 billion in interim dividend pay earlier in the year.

Multinationals Vodacom Group Limited and Vodafone Group Plc will, on the other hand, share a gross payout of Sh9.92 billion for their combined 39.93 percent interest in the company, bringing total windfall for the year to Sh19.20 billion.

Overall, Safaricom’s total dividend distribution for the year in review has dropped to Sh48.08 billion from Sh55.69 billion the year before.

Safaricom's profitability, the largest in the East and Central African region, was also impacted by a “slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones” during the financial year ended March.

The earnings were also slowed by a cut on the rate mobile phone operators charge each other for interconnecting customers at a time it was spending heavily on entry into Ethiopia.

Industry regulator Communications Authority of Kenya (CA) cut the interconnection charges, commonly referred to as mobile termination rate (MTR), from Sh0.99 to Sh0.12 to match shifts in technology that have made mobile telephony more efficient.

Read: Safaricom retains dividend payout as it enters Ethiopia

“We faced increased regulatory pressure, specifically the drop in mobile termination rates. Our customers also have lower disposable income and are seeking more value and better experience in our products and services,” Peter Ndegwa, the chief executive, said when the firm released its full-year performance on May 11.

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