The Sunday Mail
Zimbabwe Stock Exchange listed entity, Econet Wireless Zimbabwe, this week declared a third dividend payout for the financial year ended February 28, 2018.
The telecoms company announced a dividend of 0,9379 US cents per share for the third quarter ended November 30, 2017.
The dividend payout, which is the company’s first third quarter dividend since dollarisation, is in addition to what the company had already paid in both the first and second quarter of the same financial year.
Prior to this, Econet declared a dividend of 0,386 cents per share amounting to $10 million for the first quarter ended May 31, 2017.
This was followed by another payout at the release of its results for the half year to August 31, 2017, where it declared a further dividend of 0,579 cents per share.
The total dividend paid so far amounts to 1,9029 cents per share or $50 million in total.
The past year has seen cash rich ZSE listed companies going out of their way and even outside their normal dividend policies to pay out increased dividends.
One such company is Delta Corporation, which paid a dividend of 5,45 cents per share for the year ended 31 March 2017, which is 96 percent of earnings per share of 5,70 cents resulting in a 6,16 percent dividend yield.
For the half year to September 2017, Delta has since paid a handsome dividend of 2,25 cents per share, which is 85 percent of its earnings per share of 2,64 cents.
In the last year or so, we have seen Delta paying what it termed special dividends which are paid on top of the normal dividends.
An analyst with a local asset management company said the increased payment of dividends was a sign that some local companies are making a lot of cash at the moment.
“Econet was sitting on a lot of cash at half year and is no longer debt ridden so can afford to make such huge payouts.”
He added that given the current foreign currency situation, paying handsome dividends is the only way to utilise the cash pile.
“At the moment, it’s not easy for companies that rely heavily on imported equipment to deploy the cash on capex because there is simply no foreign currency for such investment.”
“What we can tell from the market at the moment is the fact that companies that have the potential to be the major growth drivers for the economy are finding it hard to find better alternatives for their spare cash than to pay dividends.
“Sadly, the current economic environment does not allow businesses to redeploy profits as access to foreign currency has become a major albatross.” The increased dividend payouts speak to the fact that companies are admitting that they no longer believe they can make use of the cash they are generating, besides paying dividends.
Delta, for example, is currently sitting on more than $100 million, which unfortunately cannot be used freely to pay for its foreign obligations or import requirements.
