Safaricom, the leading telecommunications giant, has initiated the early distribution of a final dividend amounting to a staggering Sh24.84 billion to its shareholders, thus contributing to an enhanced liquidity infusion within the economy. This strategic move saw investors receiving their concluding dividends on Tuesday, which were valued at Sh0.62 per share. This figure signifies a 17.33 percent reduction when compared to the previous year’s dividend of Sh0.75 per share.
The reduction in the final dividend, in contrast to the total payout of Sh30.04 billion recorded the previous year, aligns with a 22.2 percent downturn in the net profit reported for the fiscal year concluding in March 2023.
The company’s profit margins dipped to Sh52.48 billion from Sh67.49 billion within the prior year, marking the third consecutive year of decline. This decline can primarily be attributed to substantial capital investments made in Ethiopia, which weighed heavily on profitability.
Noteworthy among the beneficiaries of this dividend distribution is the National Treasury, which boasts a 35 percent stake in the region’s most lucrative enterprise. The Treasury is anticipated to receive Sh8.69 billion in dividends, a decrease from the Sh10.52 billion received the previous year, based on its ownership of 14.02 billion shares in the firm.
When accounting for the earlier interim dividend payment of Sh8.13 billion this year, the total Treasury payout is expected to sum up to Sh16.82 billion.
In contrast, multinational corporations Vodacom Group Limited and Vodafone Group Plc are set to share a combined gross payout of Sh9.92 billion, reflecting their collective 39.93 percent stake in Safaricom. This distribution adds up to a year-end windfall of Sh19.20 billion for the two organizations.
Overall, Safaricom’s dividend allocation for the reviewed fiscal year has declined to Sh48.08 billion, signifying a dip from the previous year’s figure of Sh55.69 billion.
The East and Central African region’s leading profitability contender, Safaricom, experienced hindrances in its operational trajectory. Factors such as the electoral period’s business stagnation, heightened excise duties on sim cards and mobile phones, as well as a reduction in interconnection charges between mobile operators, collectively contributed to the challenge.
Peter Ndegwa, the Chief Executive Officer, addressed these challenges, stating, “We encountered increased regulatory pressures, particularly the decline in mobile termination rates. Our clientele also experienced reduced disposable income while demanding greater value and superior experiences from our products and services.” Ndegwa made these remarks during the company’s full-year performance announcement on May 11.
Safaricom’s proactive approach in accelerating the distribution of dividends showcases its commitment to shareholders and the broader economic landscape, while the company continues to navigate multifaceted challenges in the telecommunications sector.
Photo Source: Google
30th August, 2023
Delino Gayweh
Serrari Financial Analyst
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023