Safaricom has started disbursing Ksh24.84 billion ($171 million) final dividend to shareholders two days earlier, helping boost liquidity in the economy.
Shareholders of the giant telco received their final payout on Tuesday at a rate of Ksh0.62 a share, a drop of 17.33 percent compared with Ksh0.75 per unit last year.
The reduced final dividend payout compared with the aggregate of Ksh30.04 billion ($206.8 million) a year earlier follows a 22.2 percent decline in net profit for the full year ended March 2023.
The firm’s profit fell to Ksh52.48 billion ($361.31 million) from Ksh67.49 billion ($464.65 million) in the prior year, for the third year in a row, largely on the back of heavy capital investments in Ethiopia.
Read: Rising costs from Ethiopia foray eat into Safaricom profits
The National Treasury will be one of the biggest beneficiaries of the dividend windfall for its 35 percent stake in the region’s most profitable company.
The Treasury’s gross dividend pay is estimated at Ksh8.69 billion ($59.8 million) for its 14.02 billion shares in the firm, a drop from Ksh10.52 billion ($72.4 million) a year ago.
This will bring the total payout to Ksh16.82 billion ($115.8 million), having received Ksh8.13 billion ($56 million) in interim dividend pay earlier in the year.
Multinationals Vodacom Group Limited and Vodafone Group Plc will, on the other hand, share a gross payout of Ksh9.92 billion ($68.3 million) for their combined 39.93 percent interest in the company, bringing total windfall for the year to Ksh19.2 billion ($132.2 million).
Overall, Safaricom’s total dividend distribution for the year in review has dropped to Ksh48.08 billion ($331 million) from Ksh55.69 billion ($383.4 million) the year before.
Safaricom’s profitability, the largest in the East and Central African region, was also impacted by a “slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones” during the financial year ended March.
Read: Safaricom profits dip on Addis entry
The earnings were also slowed by a cut on the rate mobile phone operators charge each other for interconnecting customers at a time it was spending heavily on entry into Ethiopia.
Industry regulator Communications Authority of Kenya (CA) cut the interconnection charges, commonly referred to as mobile termination rate (MTR), from Ksh0.99 to Ksh0.12 to match shifts in technology that have made mobile telephony more efficient.
“We faced increased regulatory pressure, specifically the drop-in mobile termination rates. Our customers also have lower disposable income and are seeking more value and better experience in our products and services,” Peter Ndegwa, the chief executive, said when the firm released its full-year performance on May 11.
