BY KORIR JUMA,NAIROBI,11TH FEB,2021-Leading telecom operator Safaricom has shrugged off virus concerns on operations to approve a Ksh.18.03 billion half year dividend pay out to shareholders.
In a notice issued on Thursday, the company’s board said it held a meeting on Wednesday approving the interim payment of 45 cents per ordinary share irrespective of the current operating environment which has seen most firms skip the shareholder pay outs.
“This is in recognition of the company’s solid half-year performance and to support our shareholders during this difficult economic times occasioned by the COVID-19 pandemic,” the company stated.
Nevertheless, the interim dividend declaration is on the backdrop of the first half year earnings drop for the operator in eight years with the telco having taken a revenue hit from the waiver of fees on mobile-money transactions below Ksh.1000.
In November, the firm disclosed a six per cent dip in half year earnings to Ksh.33 billion from Ksh.35.2 billion.
The free cash transfers for instance took out Ksh.6 billion from the M-Pesa purse as the majority of Kenyans opted for the cost-free transactions to include the breaking up of bigger transactions to fit the waiver.
Thursday’s dividend declaration is expected to push up the demand for Safaricom shares to include its share price as investors move to take profits from the stock.
Moreover, Safaricom is among the few firms tipped to pay out a final dividend at the close of its financial year on March 31.
Presently, Safaricom is already trading at historical highs to anchor the recovery of the Nairobi Securities Exchange (NSE) performance in the year to date.
For instance, Safaricom’s stock was quoted at Ksh.36.40 a piece at the close of trading on Wednesday, from a year low of Ksh.24.35 in the aftermath of Kenya’s first confirmed COVID-19 infection on March 13, 2020.
In contrast, other companies including NCBA, Equity Group and Standard Chartered have opted for alternatives to shareholder pay to include dividend freezes and additional share issues.
Safaricom’s half year/interim dividend is expected to be paid out by March 31 and will comprise of registered shareholders as of the close of business on March 5.