An analysis of the 71 companies that have so far declared dividend for both 2017 final dividend and interim dividend for half year 2018 has shown that a total of N797 billion was paid by the companies in the period under review.
While only six of the 71 companies – Zenith, Guarantee Trust (GTB), United Bank for Africa (UBA), Stanbic IBTC and Custodian Alliance – have declared interim dividend for half year 2018, the other are mainly full year dividend for 2017.
Similarly, none of the 71 companies declared bonus in the year under review.
Returns on investments such as bonuses and dividend payments by quoted firms remain a key attraction to shareholders as they usually look up to what various companies have to offer at the end of every financial calendar.
In 2017, 82 quoted companies declared dividends and bonuses on the Nigerian Stock Exchange.
The Financial services sector dominate the list with 23 stocks and closely followed by the Consumer and Industrial Goods sectors also with 23. The Oil & Gas sector has 7 stocks while healthcare and aviation has three each. Real estate and construction has two while ICT and natural resources and others account for the remaining 10.
However, 12 out of the total 71 companies accounted for N720.7 billion out of the N797 billion total dividend amounting to 90.4 per cent.
The 59 remaining companies paid out a cumulative N42.3 billion as dividend within the period under review.
The 12 super performers are: Dangote Cement N178.9bn, Chemical and Allied Product Plc N143bn, Access Bank N83.5bn, Transcorp Hotel N64.6bn, Zenith Bank N86.3 bn, GTB N79.4bn, Nigerian Brewery N25 bn, UBA N29 bn, Nestle N21bn, Lafarge N13bn, Stanbic IBTC N15.1bn and Dangote Sugar N15
Five banks out of the 12 super performers paid out a total of N293.3 billion amounting to about 40.7 per cent.
Only three other commercial banks paid dividend; FCMB group N1.9bn, Fidelity Bank N3.1 bn and FBNH N8.9bn which brings the total banks pay out to N307.3bn.
The CBN recently released a circular, amending a previous circular dated October 8, 2014 on internal capital generation and dividend payout ratio.
The new circular introduced some conditions for banks to be allowed to pay dividend, which are the Composite Risk Rating of the bank, non-performing loans (NPLs) ratio, as well as Capital Adequacy Ratio (CAR).
While banks do not publicly disclose their Composite Risk Rating, the minimum CAR for international banks in the country is 15 per cent, 10 per cent for national banks and 16 per cent for systemically important banks.
The new CBN circular among others, stated: “No bank shall be allowed to pay dividend out of reserves. Banks that do not meet the minimum capital adequacy ratio shall not be allowed to pay dividend.
A further breakdown of the figures indicates that while some companies may have made huge payments to their shareholders, it does not translate so much when the total amount paid is divided by the total number of shareholding in the company.
An analysis by Daily Trust indicates that the total dividend pay-out of Chemical and Allied Product Plc translated to N205 per share. Nigeria Energy Sector funds ranked second with N102 per share. Nestle N27.5, Total N45 and Transcorp Hotel N12:45.
Dangote Cement had N10:50k; Aluminium Extrusion Industry, N8:50; 11 PLC N8:00k; GSK, N7:50k; Nigerian Brewery, N3:13k; Okomu oil, N3:00k; Zenith, N2:45k; GTB, N2:40k and Presco N2:00k. Nine other shares paid under N2, while All other shares paid less than N1:0k.
A review of the year 2017 corporate results of 96 major companies quoted on the NSE showed a significant impact of the recovery of the economy which started mid last year, with their gross earnings surging by over 22.3 per cent to hit N7.6 trillion from N6.2 trillion in 2016.
The result indicates general upbeat in gross earnings and Profit Before Tax, PBT, with companies drawn from various sectors of the Exchange posting combined profit of N1.8 trillion, representing a huge 40 per cent rise against N1.2 trillion reported in the corresponding period of 2016.
Meanwhile, analysis of the 96 companies’ performance in 2017 showed that the banking sector dominated other sectors in both gross earnings and PBT, recording N2.5 trillion and N662 billion, thus accounting for 40 percent and 36.8 percent of the total gross earnings and PBT respectively.
Trailing behind the banking sector is the Oil and Gas sector, recording N971bn gross earnings and N50.7bn PBT, thus accounting for 15.7 percent of the total gross earnings, but occupied fifth position in terms of PBT as it accounted for a paltry 2 .8 per cent of the combined profit.
Industrial Goods sector came third, recording N898 billion gross earnings and N307 billion PBT, thus accounting for 14.5 per cent of the total gross earnings and 17.1 per cent of the combined companies’ PBT. It was followed by Consumer Goods recording N822 billion gross earnings and N146 billion PBT and accounted for 13.3 per cent of the total gross earnings and 8.2 per cent of combined PBT, while Breweries/Beverages sector occupied fifth position recording N508 billion gross earnings and N53 billion PBT, thus accounting for 8.2 per cent and 3.2 per cent of the total gross earnings and PBT respectively.
Mr. Dolapo Ashiru, CEO, Mega Capital Financial Services Limited, said: “The upsurge in the earnings and profitability of quoted companies is attributed to the improved liquidity in foreign exchange, FX, which occurred around May last year due to the introduction of the Investors’ & Exporters, I&E FX window along with improved macro-economic indices and Gross Domestic Product, GDP.
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