Safaricom to contribute 80pc of Treasury dividends budget
From left: Safaricom chief financial officer Sateesh Kamath, chairman Nicholas Ng’ang’a and Strategy and Innovation director Joe Ogutu during full-year investor briefing on Wednesday. PHORO | DIANA NGILA | NMG
What you need to know:
Telco projected to contribute Sh15 billion in dividends in the next fiscal year.
The payment of this dividend is expected in December 2018, going by past practice of the telco.
KCB and KenGen are expected to contribute Sh2 billion and Sh1 billion respectively
Safaricom #ticker:SCOM will contribute nearly 80 per cent of the government’s projected dividend earnings of Sh19.8 billion in the fiscal year 2018/19, highlighting the Treasury’s heavy reliance on the telecommunications firm to meet its investments income budget.
The telco on Wednesday announced a Sh1.10 per share dividend after reporting a record net profit of Sh55.3 billion for the year ended March 2018, meaning that the government’s 14.02 billion shares (a 35 per cent stake) in the firm will net the exchequer Sh15.42 billion in dividends.
The payment of this dividend is expected in December 2018, going by past practice of the telco.
Treasury estimates of expected investment income from State corporations, government agencies and other organisations published on April 26 show that the telco was projected to contribute Sh15 billion in dividends in the next fiscal year.
KCB #ticker:KCB and KenGen #ticker:KEGN are expected to contribute Sh2 billion and Sh1 billion respectively in dividends to the exchequer, the document shows, leaving 15 other corporations and companies to fork out the remaining Sh1.8 billion.
The government owns 17.5 per cent of KCB, equivalent to 537.4 million shares, which implies that the lender would have to raise its dividend per share for the year ending December 2018 to Sh3.75 from 2017’s Sh3 per share if Treasury is to hit the projected amount.
KCB announced a flat Sh19.7 billion in net profits for the year ending December 2017, but maintained an unchanged dividend at Sh3 per share.
The bank has already paid a Sh1 per share interim dividend (on October 31, 2017) with the final dividend of Sh2 per share due to be paid out on June 29 —both dates falling in the current fiscal year when the government targeted and achieved Sh1.6 billion in dividends from the lender.
The projected Sh1 billion income from KenGen suggests that the Treasury expects the power generator to return to paying dividends in the year ending this June, having held shareholders to a two-year dividend drought.
Majority shareholder
The government is the majority shareholder in KenGen with a stake of 70 per cent, equivalent to 4.62 billion shares, meaning that for the Treasury to achieve the Sh1 billion dividend target the company would need to pay out at least 21 cents per share to shareholders.
Other listed firms are expected to contribute between Sh3.5 million and Sh350 million each in dividends, including the NSE (Sh3.5 million), HF (Sh10 million), Stanbic (Sh30 million), Kenya Power (Sh300 million) and Kenya Re (Sh350 million).
Non-listed entities expected to contribute dividends include the Kenya Pipeline at Sh300 million, Kenya Airports Authority at Sh130 million and Kenya Ports Authority at Sh498 million.
Others such as the New KCC, PTA Re, Kenya Literature Bureau, African Exim Bank, Africa Re and National Housing Corporation are expected to pay the State dividends worth between Sh15 million and Sh50 million each.
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