Safaricom Declares Interim Dividend of Ksh 0.45 Per Share for HY21

Safaricom HY Results: Net Profit Drops 6% to Ksh 33 Billion

Peter Ndegwa Chief Executive Officer (CEO) of Safaricom PLC

Safaricom on Thursday declared an interim dividend of Ksh 0.45  per share.  

This interim dividend payout translates to an amount of Ksh 18,029 billion for the year ending 31 March 2021. 

“This is in recognition of the Company’s solid half-year performance and to support our shareholders during these difficult economic times occasioned by the Covid-19 pandemic,” Safaricom Kenya’s telecom market leader said in a notice to its shareholders on Wednesday.

Safaricom, part-owned by South Africa’s Vodacom and Britain’s Vodafone (40%) will share a gross payout of KSh7.2 billion. The National Treasury with 35% stake will get a gross payout of KSh6.3 billion.

The telco posted a 6 per cent decline in profit at Ksh 33 Billion for the September quarter attributed to lower M-Pesa earnings following the Central Bank of Kenya’s directive to remove fees on transactions less than KSh1000.

The current share price of Safaricom is Ksh 36.40. Wednesday, the stock closed at Ksh 36.40 per share a 0.55% drop from its previous closing price of Ksh 36.60.

According to the Nairobi Securities Exchange (NSE)  data, Safaricom began the year with a share price of Ksh 34.25 and has since gained 6.28% on that price valuation, ranking it 7th on the NSE in terms of year-to-date performance.

“The bullishness is a spillover from late last year, mainly from the foreign end (Ksh 1.7Bn in foreign inflows YTD) in what could partly be attributed to the global bullishness towards tech and work-from-home stocks,” Genghis Capital Market Analysts said. 

Genghis adds that this is anchored on the telco’s sustained innovation from the business supports the sentiment including expiry of free M-Pesa transactions of below Ksh 1,000 on Dec 31st, maintained higher M-Pesa wallet and transaction limits (Ksh 300K) both supporting stronger revenue recovery on M-Pesa.

In addition, a partnership with the public transport sector to facilitate cashless commuter payments through M-Pesa, upgrades to its M-Pesa Bill management
and news that all its competitors violate quality of service parameters as set by Communications Authority (Safaricom rated at 92% with the largest competitor at a distant 52%) underlining its keenness on quality of service and customer focus.

“We are of the view that the emerging trend favoring innovation and capabilities of technology in an increasingly digital world, will continue to support the positive sentiment on such stocks,” they note.

Safaricom is expected to announce a final dividend when it releases its results for the year ending March.

In FY 2020, it paid a final dividend of KSh 1.40 per ordinary share paid in FY 2020 which was up from Ksh 1.25 paid in 2019.

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