Who Paid Dividends in 2017?

Financial Insight is an avid follower of listed companies on LuSE and other stock exchanges. We believe they continue to hold the secret ingredient of unlocking value in sub Saharan Africa. Every investor on any stock exchange looks forward to the end of year audited financials in order to take a peek at how well their company performance was. Depending on why type of investor you are, portfolio growth or a dividend payment will tickle your fancy.

In 2017, only 8 out of the 22 listed companies on LuSE will go on record as having paid dividends to their shareholders. This represents 36% of the companies on the Lusaka Securities Exchange that will be posting a Cheque to their shareholders.

With a macroeconomic environment that was challenging for many (sector dependent for some), paying a dividend means a lot for investors as this inspires continued confidence in the company. The sectors that came out on top included Insurance, Real estate, Banking, Mining, Manufacturing and Hospitality.

For another year running, AEL Mining came out on top with the highest dividend paid (48ngwee) while Prima Reassurance paid the lowest at 5 ngwee.  FQM mining also declared a dividend which should come as no surprise as the performance of Copper on the London Metal exchange has been bullish over the last couple of quarters.

Real Estates Investments, which also made the list, continues to inspire because although it has faced a lot of competition on the premium end of its business and its portfolio of shopping malls, the declared dividend is indicative of astute usage of its assets.

Copperbelt Energy (CEC) may have ended the year with a big announcement of a possible suitor in CDC, but the dividend declared further consolidates and justifies its potential buyer’s premium offer for the listed shares.

Out of the three banks, Standard Charted was the only one to declare a dividend. However, with its near rival completing its transformation, we believe that they will not hold this position of being the old bank to declare a dividend for much longer. Towards the epilogue of 2017, we noted that through their near rival’s “Bank Here” campaign they would be pursing an aggressive strategy in 2018.

ZAMEFA may have started the year 2017 on a rocky note post the conclusion of its acquisition with a sluggish start to the year on the local front which the management team attributed to tightened liquidity in the market and reduced local appetite for copper wire. Despite all possible woes in the business environment, they managed to come out on top. This is indicative of the company ending the year on a high note in terms of receivables.

Hospitality also impressed with Pamodzi declaring a dividend in an arena that has received a lot of support from various stakeholders. As a matter of fact, the 7 national development plan indicates that government will support this sector. IDC has also prioritized the sector as a job creation source. Hopefully, this will continue to inspire more dividends in future for the hotel.

The relative performance of the companies can be equated to the general performance of other players in their respective industries. However, this would be a simplistic approach to industry estimation because other players are not listed and have varying economics that affect their companies. However, we can infer to some degree that the sectors that have performed well are indicative of industries that are currently yielding positive earnings albeit backed by high performing management teams.


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