Dividends paid out to multinationals for their controlling stakes in Nairobi Securities Exchange-listed firms are set to drop by 21 percent this year as a few blue-chips reduced their payouts by significant amounts.
Multinational firms including Vodacom Group, Diageo Plc, WPP Plc and BAT Plc have received or are set to get a total of Sh38.4 billion based on the latest distribution announcements.
This will be Sh10.2 billion lower compared to last year’s payout of Sh48.6 billion, but a boost to the cash flow of the mainly European-based multinationals who are freezing dividends and shoring up reserves as the coronavirus pandemic threatens to tip the world into a deep recession.
The reduction could be mitigated if East African Breweries Limited (EABL) pays a final dividend for the year ending June. The brewer last week issued a profit warning, suggesting that its net earnings for the year ending June are likely to decline by 25 percent compared to the previous period, hurt by coronavirus. Safaricom, BOC Kenya, Bamburi, BAT Kenya and Liberty Holdings were among the NSE-listed companies that suspended or reduced their payouts in their latest results, lowering cash returns for their parent firms.
