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By Chinwendu Obienyi
Nine quoted companies on the Nigerian Stock Exchange (NSE) paid over N783.4 billion in dividends to shareholders in the financial year of 2020.
Data obtained from financial statements of some highly capitalised companies on the NSE, the nine companies which include BUA Cement, Dangote Cement, First Bank, GT Bank, MTN, Nestle, UBA, Union Bank and Zenith Bank, reported N783.4 billion in dividends paid out of their cash flow statements.
For example, Nigeria’s second largest cement company, BUA Cement, reported a whopping 1000 per cent in dividend largely due to the consolidation of the group’s cement businesses across the country, while paying out N59.2 billion in dividends in the year.
As expected, Dangote Cement topped as the highest paying dividend company in Nigeria, returning N272 billion to its shareholders in 2020 in a seemingly unchanged stance from 2019. For its part, First Bank recorded N14.2 billion while GT Bank posted N83 billion payout to its shareholders.
Further analysis showed that MTN’s dividend grew by 29.5 per cent year on year while paying out N172 billion, Nestle announced the payment of N28.1 billion to its shareholders as the final dividend for the period ended December 31, 2020 while UBA paid N33 billion.
Union Bank recorded over 1,400 per cent increase in dividends paying out over N7 billion in 2020 as it skipped dividend payments in 2019 except for minority shareholders while Zenith Bank paid N87.9 billion.
This meant that over N783.4 billion in dividend was paid out to shareholders in 2020. The figure meant that the aforementioned companies’ dividends kept their commitments to return cash to their shareholders despite a precarious year that was marred by the COVID-19 pandemic.
At the height of the pandemic in March 2020, some companies like Julius Berger cut back on dividend payments, rather than pushing for bonus issues alongside dividends.
But some experts who spoke to Daily Sun, said that despite the figure paid out, returns from the companies remained flat when compared with the sum paid out in 2019 when adjusted for exchange rate devaluation.
National Coordinator, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said that although he was pleased with the dividend payout amidst the COVID-19 pandemic, the companies ought to have improved on their dividend.
“We saw the impact of COVID-19 on the global business economy and I was not surprised that the figure paid out in 2020 droppedwhen compared with how much dividend they paid in 2019. Yes, the pandemic affected the dividend but companies should have found a way to increase the dividend but by and large, what they have paid out is commendable because if they had done much, it would have affected their bottomline”, Okezie said.
Also reacting, analysts at Nairametrics, said they expected dividend payments in 2021 to top what was paid in 2020 as companies recover from the challenges of COVID-19.
