Sixty-five companies listed on the Nigerian Stock Exchange (NSE) have collectively paid their shareholders N419.7 billion as dividend for the financial year ended December 31, 2013.
The data was derived by BusinessDay Research and Intelligence Unit (BRIU) after collating all corporate actions made available to the public by the NSE. The 65 companies under review accounted for 83.23 percent of the total
market capitalisation as at June 30, 2014.
Statutorily, the shareholders are expected to pay N42 billion from their dividend to the Federal Government as withholding tax (WHT), which is 10 percent of the dividend payable by shareholders, a rate which applies to both resident and non-resident investors.
“Dividend paid by listed companies this year is a spillover of the good performance the market posted in 2013 because the Nigerian Stock Exchange’s index recorded considerable appreciation last year,” said Layi Olaleru, divisional head (operations), Cordros Capital, an investment house based in Lagos.
The amount of dividend paid so far varies across sectors, as well as among firms under review.
The financial services sub-sector, comprising the deposit money banks (DMB), insurance firms, investment banks and registrars, paid N186.9 billion as dividend in FY 2013, equivalent to 45 percent of the total
dividend paid by listed companies.
“Banks will always make profit because they have many sources of income,although they faced some regulatory challenges in 2013,” Olaleru said.
The financial services sub-sector is followed by the building materials sub-sector which paid N132 billion as dividend in the 2013 financial year, accounting for 31 percent of the total dividend paid by listed companies.
The food products and breweries/distillers sub-sector paid N32 billion as dividend each, meaning each of the sectors accounted for 8 percent of the corporate actions announced by listed companies till date.
“The amount of dividend paid so far by quoted companies is a barometer that dividend-focused investors can use to appraise the companies that are doing well in the country, just as it can be used to measure the buoyancy of the overall economy, relative to the performances of countries in emerging markets,” said Saheed Bashir, an investment analyst with Meristem Securities.
The cumulative dividend paid by firms operating in other sub-sectors include personal/household goods N9.89 billion (2 percent); oil and gas N9.86 billion (2 percent); diversified industries N5.82 billion (1 percent)); construction/real estate N3.2 billion (1 percent), crop production N1.05 billion (0.3 percent), among others.
Nestle Nigeria plc ranked tops in terms of dividend per share, in the sense that the company declared N24 as the final dividend per share, having paid an interim dividend of N1.5 per share.
That brings Nestlé’s corporate action in FY13 to N25.5 per share.
Total Oil ranked second, as it paid N9 dividend per share. Nigeria’s most capitalised firm, Dangote Cement, came third. It declared N7 as dividend per share for shareholders in FY13.
Other notable companies that paid above N1 as dividend per share include Mobil Oil N6; Nigerian Breweries N4.5; Forte Oil N4, and Lafarge Cement Wapco N3.30.
A further analysis of the ownership structures of the companies shows a list of institutional investors whose investments are doing well in the country and whose dividend might be repatriated back to their home countries.
In the food products sub-sector, Nestle Central & West Africa, and Nestle S.A. Switzerland, which both own 63.48 percent of Nestle Nigeria plc, realised N11.54 billion as dividend, while Cadbury Schweppes Overseas Ltd, which controls 74.97 percent of Cadbury Nigeria plc, also made N1.64 billion as dividend.
A.G. Leventis in the diversified industries sub-sector is mainly owned by Leventis Holdings S.A. 57.06 percent, Boval S.A. 24.2 percent, and Leventis Overseas 6.69 percent. They collectively made N335 million as dividend in the same financial year.
Heineken Brouwerijen BV and Distilled Trading International BV earned N16.6 billion as dividend with their 54.09 percent control of Nigeria Breweries.
Lafarge Nigeria (UK) earned N496 million from Ashaka Cement, with its 58.61 percent ownership in the company; Lafarge S.A. also got N5.34 billion from Lafarge Cement Wapco, with its 60 percent control of the firm, while Bilfinger SE earned N1.16 billion from Julius Berger Nigeria plc because it controls 39.9 percent of the company’s shareholding structure.
Teliat Sule
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