Telco giant Safaricom has started disbursing dividends to its 560,018 shareholders two and a half months ahead of time signaling sturdy cash flows at the telecommunication company. The gross dividends, amounting to Ksh. 74.9 billion, were supposed to be distributed on November 30, 2019.
According to a news report by the Business Daily, the telco started dispensing ordinary dividends on Saturday, at the rate of Ksh. 1.25 per share to retail investors via its M-Pesa platform. The company only uses M-Pesa to allocate dividends, not exceeding Ksh. 70,000, to shareholders. Payments of special dividends will however commence this week at the rate of Ksh. 0.62 per share.
“We paid out the ordinary dividend last week and the special dividend will be made this week,” a source at Safaricom’s investor relations is quoted by the Business Daily.
Some of the telco’s investors anticipated to reap big from the dividend roll out include the National Treasury, which is entitled to a gross payout of Ksh.26.2 billion for its 35 percent stake in the company and UK’s Vodafone which will earn Ksh.29.9 billion in dividends.
Safaricom as reported by the local daily is one of the few companies listed on the Nairobi bourse that pay dividends ahead of scheduled times. The ongoing dividend distribution takes Safaricom’s cumulative payouts to Ksh. 301.2 billion since the company’s initial public offering (IPO) on June 9, 2008.
In the year ended March 2019, Safaricom injected Ksh. 601 billion into the economy in the year ended March 2019 up from Ksh. 543 billion registered in a similar period last year. The Ksh. 58 billion increase translates to an 11 percent surge in the telco’s value to the Kenyan economy and a 6.3 percent contribution to the country’s Gross Domestic Product (GDP). According to the firm’s 2019 True Value Report, the contribution came in the form of jobs, value chain opportunities for other businesses, taxes and dividends to shareholders as well as payments to contractors and suppliers.