MTN Nigeria Communications (MTNN) Plc and seven others listed on the Nigerian Exchange (NGX) Limited has declared a total of N175.207 billion as interim dividend payout for the first half of the year, ended June 30, 2022.
The Companies’ results for the period under review were impressive despite harsh operating environment. The other companies are Stanbic IBTC Holdings, Zenith Bank, Guaranty Trust Holding Company (GTCO), Access Holdings, United Bank for Africa (UBA), Okomu Oil Nigeria and Fidelity Bank.
Dividend has remained one of the key factors that traditionally drive market activities and aids investment decisions towards stocks across the globe, and Nigerian bourse is not an exception.
A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business called retained earnings and pay a proportion of the profit as a dividend to shareholders.
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, 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. The interim dividends were paid out of profits earned in the first half of the year.
For the period under review, MTNN in line with its dividend policy 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 N19.435 billion, while Zenith Bank and GTCO proposed an interim dividend of 30 kobo each, amounting to N9.419 billion and N8.829 billion, respectively.
Also, Access Bank and UBA offered an interim dividend of 20 kobo, amounting to N7.109 billion and N6.840, respectively, while Okomu Oil paid an interim dividend of N7.00 per share or N6.677 billion. Fidelity Bank’s interim dividend amounted to N2.898 billion or 10 kobo per share.
It has been noted that the Nigerian economy over the past six months was characterized by diverse economic vulnerabilities, which include unprecedented surge in energy prices which had a very huge adverse effect on economic players across all sectors; unprecedented level of currency depreciation and currency volatility; increasingly weak fiscal space; among others. However, the economy continues to demonstrate resilience amid all of these harsh investment environments.
Speaking on companies’ performance in H1, the chief operating officer of InvestData Consulting Limited, Ambrose Omordion said that dividend payment in equity investment is as old as the stock market itself which is a function of company profitability at any given time.
He stated that the key to any successful portfolio is stable growth and additional income from interim or full year dividends that gives investors the flexibility to earn some cash for reinvestment or to meet their personal needs, saying that investors are advice not to overlook the opportunities for high dividend yield in the market regardless of the expected dividend cut in some industries due to prevailing economic situation and other reasons.
CEO of MTN Nigeria, Karl Toriola said, “During the first half of 2022, we made good progress in strengthening the resilience of the business in the face of our increasingly challenging operating environment with rising energy, food and general inflation putting pressure on consumer spending.
“The conflict in Ukraine as well as implementation of a “Zero-COVID” policy in China, has also put a strain on global supply chains. To mitigate global supply chain and exchange rate risks, we accelerated capital expenditure for network expansion into the H1 2022.”
He stated that “in line with our dividend policy, our board of directors has approved an interim dividend of N5.60 kobo per share to be paid out of distributable net income. This represents a growth of 23.1 per cent over the N4.55 kobo per share paid in H1 2021.
CEO of Fidelity Bank, Mrs. Nneka Onyeali-Ikpe, said that “on the back of the positive H1, 2022 performance, the board of fidelity bank approved an interim dividend of 10 kobo per share, making it the first time the bank will pay an interim dividend in its 34 years history.”
