This archive report was first published on 17 September 2019.
Published on September 17, 2019, Safaricom has made history by paying out Sh74.9 billion in dividends, a significant amount that surpasses the net income of Sh62.5 billion the company made in the year ended March 2019.
The telco has started distributing the gross dividends through its mobile money service platform, M-Pesa, which is used to distribute dividends of below Sh70,000. The payment is one of the earliest dividend payments among Nairobi Securities Exchange-listed firms and signals strong cash flows at the telco.
Beneficiaries of the windfall include the National Treasury, which is entitled to a gross payout of Sh26.2 billion, and UK's Vodafone and its affiliates, which will earn Sh29.9 billion.
According to Safaricom's annual report, the company proposed a special dividend for this year of Sh24.8 billion (Sh0.62 per share), citing its strong financial position. The telco notes that it has a policy of maintaining its dividend payout but adds that 'past dividend payments should not be taken as an indication of future payments.'
Analysts expect M-Pesa, whose latest offshoot is the daily revolving credit service, Fuliza, to be the company's growth driver in coming years. In the year ended March, M-Pesa revenue recorded the highest growth rate of 19.2 per cent to Sh75 billion.
Since its initial public offering (IPO) on June 9, 2008, Safaricom has paid out a cumulative total of Sh301.2 billion in dividends, exceeding the entire capital investment by shareholders, including the Kenya government and UK's Vodafone Group Plc and its affiliates.
