Shareholders of Nairobi Securities Exchange (NSE) will earn a record dividend of Sh364 million for the year ended December 2021 after the company declared another special payout on top of a final dividend.
The bourse operator announced a final dividend of Sh0.4 per share and a second special payout of Sh0.5 per share, adding to the first special distribution of Sh0.5 per share in December.
This will bring the total dividend to Sh364 million or Sh1.4 per share, representing a 164 percent increase from Sh137.5 million or Sh0.53 per share paid for the prior year.
The higher payout came despite net income declining 21 percent to Sh132.5 million on higher costs.
“We have generated good cash in the business and we want to reward our shareholders who have been very patient, rarely trading their holdings,” NSE’s chief executive Geoffrey Odundo said.
“The payouts strike a balance between our needs for long-term capital investments and cash returns to our shareholders in the short term. Part of the cash for the dividend will come from retained earnings but the business also continues to generate cash at a healthy pace.”
The company’s interest income rose by a quarter to Sh105.7 million even as its investment in short-term financial assets remained unchanged at Sh1.1 billion, indicating an increase in interest rates.
Revenue increased marginally to Sh550.5 million, with the interest income helping to increase total income 6.6 percent to Sh714.2 million.
A seven percent jump in operating expenses to Sh500 million and a higher effective tax rate, however, lowered the bourse operator’s net profit.
NSE joins other listed firms that have declared record dividends as the economic impact of the Covid-19 pandemic recedes.
The companies had in the previous two years bulked up their capital reserves, having sought a buffer against the economic downturn wrought by the pandemic which first hit Kenya in March 2020.
The NSE’s performance is however largely dictated by the general performance of trading at the bourse —given that the firm draws the bulk of its revenue from levies on trading activity.
Last year, equity turnover fell by 7.6 percent to Sh137.4 billion as investors turned to fixed income assets in search of more attractive yields. Bonds turnover rose by 38 percent to a record high of Sh956 billion.
