Money Markets
Safaricom CEO Bob Collymore. File
By OKUTTAH MARK
In Summary
- Central Bank of Kenya, which has long been a top surplus earner for Treasury, failed to pay anything this year.
- In absolute terms, Safaricom’s Sh18.8 billion payout is the largest ever paid by a firm publicly traded in Kenya.
The Communications Authority of Kenya (CA) has lost
the title of the highest dividend-paying firm to the Treasury in a shift
that has seen Safaricom come tops and Central Bank disappear from the rankings.
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The telecoms regulator was pushed into second place by
Safaricom, which paid the Treasury Sh6.4 billion this year. The CA
earned the government Sh4 billion, down from Sh6 billion last year.
Central Bank of Kenya, which was recently the
second top dividend earner for Treasury, failed to pay a dividend this
year after it reported an operating deficit attributable to a drop in
interest income.
The banking regulator paid the Treasury Sh2.1
billion last year and Sh3.1 billion in 2012. Kenya Ports Authority, KCB
Group and KenGen are among top firms that offered a share of their
profits to the government.
“The previous year, we handed over Sh6 billion to
the National Treasury. There were no deductions as we were not compelled
to pay tax,” said Francis Wangusi, the CA director- general.
The regulator earns its income from fees levied on
telecommunication operators. These include Safaricom which paid Sh8.7
billion in the year to June 2013 as regulatory fees, up from Sh6.4
billion a year earlier.
Safaricom’s super profits changed the face of
government’s top dividend-paying firms. The telecoms operator announced a
record Sh18.8 billion pay-out to shareholders after a 31.4 per cent
jump in net profit for the year ended March.
The Treasury got a Sh6.5 billion dividend cheque
for its 35 per cent stake, making the telecoms operator one of the most
successful public investments in recent times. It paid the government
Sh4.3 billion last year, placing it second behind CA at Sh6.2 billion.
The massive dividend pay-out is also good news for
retail investors who have been earning only a few hundred shillings for
their small holdings since Safaricom was listed in 2008. At Sh0.47 per
share, the pay-out is 51 per cent higher than the previous year’s
Sh0.31.
In absolute terms, Safaricom’s Sh18.8 billion is
the largest dividend ever to be paid by a publicly traded firm in NSE’s
history.
Besides the strong earnings, investors in the
telecoms operator also stand to benefit from a possible continuation of
the share price rally at the Nairobi bourse. The Treasury has been
looking up to regulatory agents and other State corporations to finance
it in a bid to bridge a budget gap.
In 2012, it earned Sh21.2 billion from dividends and surpluses remitted by firms where the government has stakes with KCB, Safaricom, CA, KPA, KenGen and CBK accounting for 64 per cent of the cash.
CBK dropped from the rankings this year after its
operating income dropped to Sh7.4 billion from Sh14.2 billion, resulting
in the regulator sliding into a deficit position despite cost-cutting
measures which saw its expenses shrink by close to Sh3 billion to Sh9.3
billion.
KCB for the first time joined the club of firms
that pays Treasury dividends in excess of Sh1 billion, forking out
Sh1.04 billion for its 17.55 per cent stake, up from Sh994 million last
year. KenGen handed Treasury a Sh923 million dividend cheque, unchanged
from last year.
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