African markets

Kenya: Listed companies increase dividend to 130 billion shillings

Dividend payout by all Nairobi Stock Exchange (NSE)-listed companies hit a record 130.3 billion shillings in their respective last fiscal years as profits recovered from the impact of the Covid scourge -19.

That was a jump of 53.5% from the total payout of 84.9 billion shillings a year earlier, marking a sharp drop that shook off years of steadily rising cash distributions.

East Africa Breweries Plc (EABL), Absa Bank Kenyaand Equity Group are among the companies that have resumed paying dividends while others such as Car and General and Carbide investments improved their payouts, helping set the new payout record.

The latest annual payouts indicate that the broader market, currently valued at 2.18 trillion shillings, has a dividend yield of around 6%.

The cash yield ratio was weighed down by dozens of companies that have not paid dividends in years, including Eveready East Africa, Kenya Airways, Britam Holdings, WPP Scangroup and TransCentury.

The dividend analysis excludes foreign companies co-listed on the NSE and which have a small local shareholder base.

Most listed companies have December as their year-end, but there are a few that close their books in September, March, June and July.

An analysis from the Business Daily shows that SafaricomEquity Group, KCB GroupEABL, Standard Chartered BankKenya and Absa Bank Kenya were the companies with the largest dividend distributions.

The record payout boosts returns for stock market investors, including individuals and institutions.

The data was sampled from annual reports for the past five years, which showed Safaricom had the highest payout of all years.

The telecom operator increased its payout to 55.6 billion shillings in the year ended March, from 54.89 billion shillings a year earlier.

The most profitable company in the country accounts for almost half of all the money distributed by companies listed on the stock exchange. The telecommunications company maintained a policy of paying 80% of its net income to shareholders.

The shares, which skipped dividends in the two years of the pandemic, came back to pay out a record 11.3 billion shillings in the year to December. The bank has developed a new policy of paying out between 30% and 50% of its net profits.

KCB paid a dividend of 9.6 billion shillings for the same period, the amount still below the maximum payment of 11.2 billion shillings in 2019.

The country’s second-largest bank had cut its dividend to a minimum of 3.2 billion shillings in 2020 as it also sought to ride out the crisis while pursuing acquisitions in the region.

KCB has previously paid around half of its net income, but has fallen below that level as it makes acquisitions in the region, the latest being the proposed purchase of an 85% stake in the Trust Merchant Bank of the DRC for 15 billion shillings.

EABL resumed paying dividends in the year ended June with a payout of 8.6 billion shillings after posting strong sales and profit growth, performance linked to the economic recovery and the lifting of Covid-related restrictions that had hurt sales of alcohol products in bars and other establishments. .

Stanchart increased its payout by 80.9% to a new record high of 7.1 billion shillings in the year ended December, while Absa resumed paying dividends in the same period at 5 .9 billion shillings.