Shareholders of MTN Nigeria Communications Plc and five banks on the Nigerian Stock Exchange (NSE) will be receiving a total of N101.91 billion as interim dividend payout for the first half of the year.
Dividend has remained one of the key factors that traditionally drive market activities and aid investment decisions towards stocks across the globe, including Nigeria.
Dividend payments allow shareholders to benefit from earnings growth through both interim and final dividends.
Interim dividends can follow the same strategy as final dividends, but since interim dividends are paid out before the end of the fiscal year, the financial statements that accompany interim dividends are unaudited.
The five banks are Zenith Bank, Guaranty Trust Bank, Access Bank, United Bank for Africa (UBA) and Stanbic IBTC Holdings.
They were able to declare interim dividends in the first half of the year ended June 30, 2020 even as the nation grapples with the economic consequences of COVID-19.
The dividends were paid out of profits earned in the first half of the year.
For the period under review, MTN Nigeria, in line with its dividend policy, approved an interim dividend of N71.67 billion, representing N3.50 per share to be paid out of distributable net income.
Zenith Bank and Guaranty Trust Bank proposed an interim dividend of 30 kobo each, amounting to N9.4 billion and N8.8 billion respectively, while Access Bank, UBA and Stanbic IBTC Holdings offered an interim dividend of 25 kobo, 17 kobo and 40 kobo, amounting to N8.47 billion, N5.8 billion and N4.2 billion, respectively.
The COVID-19 pandemic took the world by surprise and has engulfed nearly the entire world, claiming lives and damaging businesses and at large hitting hard on economies of world.
This has also affected the Nigerian equities market but not as serious as expected with year-to-date loss of 4.66 per cent as at September 11, 2020.
This surprising feat in Nigeria, particularly during the pandemic, was attributed to smart investors’ bargain hunting and the release of good financial results by some of the listed companies along with improved interim dividend declarations in recent time.
Speaking on the banks’ H1 financial results, CEO of Guaranty Trust Bank, Segun Agbaje said, “These are undoubtedly tough and trying times for people, businesses and economies – the world over. Our financial performance in the first half of the year reflects the quality of our past decisions which have broadened our earnings and strategically positioned us to thrive thus far, through the current global health and economic crises.
“Underpinning this financial performance is our commitment to being there for our customers and the communities we serve, and over the past six months we have lent the full weight of our franchise to safeguarding lives and livelihoods of our staff and customers by leading from the front in the fight to curtail the COVID-19 outbreak and offering grace periods on loans to our small business customers.”
On his part, group managing director/CEO of UBA, Mr Kennedy Uzoka, said, “Our H1, 2020 results is yet another demonstration of the resilience of our business model in an extremely uncertain and tough operating environment. We recorded commendable growth in our underlying business in terms of customer acquisition, transaction volumes and balance sheet whilst inflation, depressed yield environment and exchange rate volatilities impacted our net earnings as anticipated.”
Uzoka added that despite the short-term challenges to various economic sectors occasioned by the COVID-19 pandemic the bank is focused on the fundamentals of businesses in growth-driving sectors of various economies in which we operate.
He expressed confidence in the bank’s capacity to deliver good returns to shareholders.
Similarly, CEO of MTN Nigeria, Ferdi Moolman, said the company experienced a challenging operating environment in the second quarter of 2020 characterised by COVID-19 induced lock downs and the broader macro-economic impact it has had.
“Despite this, we have maintained double-digit service revenue growth of 12.6 per cent for H1, driven by strong growth in our key revenue lines,” he added.
On outlook, the MTN boss said, “The early trends emerging from the easing of lock down restrictions indicate a steady normalisation of our revenue mix However, It remains unclear how this will continue to evolve for the remainder of the year giving the ongoing uncertainties presented by the COVID-19 pandemic on the economy and on the customers.”