Safaricom #ticker:SCOM has started distributing gross dividends amounting to Sh74.9 billion more than two-and-a-half months ahead of the scheduled payment date of November 30.
This is one of the earliest dividend payments among Nairobi Securities Exchange-listed #ticker:NSE firms and signals strong cash flows at the telco.
Beneficiaries of the windfall include the National Treasury, which is entitled to a gross payout of Sh26.2 billion and UK’s Vodafone and its affiliates, which will earn Sh29.9 billion.
Safaricom started paying retail investors on Saturday through its mobile money service platform, M-Pesa, which is used to distribute dividends of below Sh70,000. The dividends were disbursed at the rate of Sh1.25 per share for the ordinary payout, with the remaining special payment of Sh0.62 per share expected this week.
“We paid out the ordinary dividend last week and the special dividend will be made this week,” a source at Safaricom’s investor relations department told the Business Daily.
Safaricom is among a few NSE-listed firms that pay dividends earlier than the fixed timeline, with most other companies making the distributions on the stated date.
The Safaricom dividend is significantly above the net income of Sh62.5 billion that the company made in the year ended March, with the telco saying its strong financial position allowed it expand the payout.
“Given the strong position of the balance sheet, we proposed a special dividend for this year of Sh24.8 billion (Sh0.62 per share),” the company says in its annual report.
The telco notes that it has a policy of maintaining its dividend payout but adds that “past dividend payments should not be taken as an indication of future payments.”
Analysts expect M-Pesa, whose latest offshoot is the daily revolving credit service, Fuliza, to be the company’s growth driver in coming years.
In the year ended March, M-Pesa revenue recorded the highest growth rate of 19.2 per cent to Sh75 billion while voice registered a marginal increase to Sh95.9 billion.
Sales from messaging dropped 1.3 per cent to Sh17.5 billion as growth of mobile data slowed down to 6.4 per cent.
The company’s mobile subscriptions rose 7.7 percent to 31.8 million users, with 22.6 million of them actively using M-Pesa.
Safaricom says it will continue to invest in existing and new services in the near term in search of growth and diversification.
The ongoing dividend distribution takes Safaricom’s cumulative payouts to Sh301.2 billion since the company’s initial public offering (IPO) on June 9, 2008.
This means that the entire capital investment by shareholders, including the Kenya government and UK’s Vodafone Group Plc and its affiliates, has been returned and exceed by dividends alone in the 11 years.
Safaricom’s investors have also racked up capital gains of more than Sh800 million over the period, making the telco one of the most lucrative investments on the NSE in the past decade.