8 Companies’ Investors Earn N190.3bn H1 Returns

Shareholders of eight listed companies on the Nigerian Exchange Limited, will be receiving N190.324 billion as interim dividend payout for the first half of 2023 to defy challenging macroeconomic climate.

Recall that the Nigerian economy, in the first half of 2023, was quite challenging due to multiple factors. Although, the general elections held in March 2023 were considered relatively peaceful and the transition completed in May, business conditions and operating environment in the first half of the year were essentially difficult due to rising interest rates, inflationary pressures, foreign exchange volatility, and the liberalisation of the downstream sector of the oil & gas industry.

This affected Nigeria’s biggest listed firms who recorded significant foreign exchange losses in the first half of 2023, a development that is posing threats to their ability to pay dividends for the 2023 financial year.

Dividend has remained one of the key factors that traditionally drive market activities and aid investment decisions towards stocks across the globe, and the Nigerian bourse is not an exception.

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A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits as it allows shareholders to benefit from earnings growth through both interim and final dividends. Interim dividends can follow the same strategy as final dividends, it is a dividend payment made before a company’s annual release of full-year financial statements.

More often, Interim dividends are usually paid after the half-year financial statement has been released.

Nigeria’s tier-one banks, including United Bank for Africa (UBA), Guaranty Trust Holding Company, Zenith Bank, Access Holdings and Stanbic IBTC Holding Plc, and some big companies have established a regular pattern of twice-a-year dividend payment, with interim dividend usually declared in the first half reports. The dividends were paid out of profits earned in the first half of the year.

For the period ended June 31, 2023, MTN Nigeria in line with its dividend policy, the board of directors proposed an interim dividend of N113.988 billion, representing N5.60 per share.

Stanbic IBTC Holdings declared an interim dividend of N1.50 per share, amounting to N19.44 billion, while United Bank for Africa (UBA), Zenith Bank and Guaranty Trust Holding Company (GTCO) proposed an interim dividend of 50 kobo each, amounting to N17.1 billion, N15.698 billion and N14.72 billion, respectively.

Also, Fidelity Bank and Nigerian Exchange Group offered an interim dividend of 25 kobo each per share, amounting to N8 billion and N495.533 million respectively, while Custodian Investment to pay a total dividend of N882.28 million, representing 15 kobo each.

Analysts noted that these companies in H1 2023, exhibited significant growth in various financial metrics, such as profit before tax, total assets, and net profit margin.

They urged shareholders to closely monitor these developments while considering the tier one banks’ improved profitability and market performance, saying the companies have shown resilience in adapting to changing market conditions, and their strategic decisions will continue to impact their financial performance in the coming quarters.

CEO, MTN Nigeria, Karl Toriola said: “the operating conditions in the first half of 2023 remained challenging with energy, food and general inflation at elevated levels. This was due to the ongoing adverse global macroeconomic and geopolitical environment, the cash shortages experienced in Q1, forex volatility and availability and supply chain uncertainties witnessed during the period.”

Toriola noted that, “as we navigate these macro headwinds, we continue to invest in our business to further improve the quality of our offering, strengthen our commercial operations and focus on expense efficiencies and disciplined capital allocation to support earnings and cash flow generation.”

Also, chief executive, Stanbic IBTC Holdings, Dr Demola Sogunle said: “the first half of 2023 was an eventful one for us as an organisation within the Nigerian operating environment. We reported significant growth in our key income lines during the period under review. The Group’s profitability increased by over 100 per cent year-on-year (YoY), driven by growth across our revenue streams. Interest income grew by 62 per cent YoY, mainly due to higher yield and volume of loans and investments, which aligns with our efforts to support our clients through loan offerings and investment opportunities.”

He stated that the company’s financial position saw significant strengthening, evident in key metrics such as total assets, gross loans and advances, and customer deposits, expressing optimism regarding the company’s performance for the rest of the year.