Investors in 15 listed companies to forfeit 2023 dividends
There is still no rest for stock market investors, with over 15 listed companies across all sectors so far not paying dividends to shareholders for the 2023 financial year. These companies are battling persistent problems plaguing the nation's economy.
Retail investors are still suffering from years of stock market downturns and asset losses, and the country's economic woes have wiped out shareholder funds in these companies, leading to unpaid dividends that are their main source of livelihood. are facing severe predicaments. ability to pay dividends;
These companies are MTN Nigeria, Nigeria Breweries, Dangote Sugar Refinery, Nestlé, Chums, Japore Gold and NCR. Others include UPDC, Notre Chemicals, PZ Cussons, International Breweries and Livestock Feed.
For the 2022 financial year, four out of the 15 companies declared a total dividend of nearly N400 billion to their shareholders. For example, MTN Nigeria paid a total dividend of N317.5 billion and the highest amount reached N5.60 billion, while Dangote Sugar declared a dividend of N18.32 billion within the period. , equivalent to N1.50 per share.
Nestlé shareholders received a total dividend of 46.75 billion naira, which translates to 61.50 naira kobo. The Nigerian brewery within the period announced a dividend of N13.87 billion, the amount amounting to N1.43 kobo.
However, harsh economic realities have seriously affected its performance, resulting in a huge loss for its 2023 business. Some companies' losses were mainly due to foreign currency loans from their parent companies or foreign sources, while others were overwhelmed by the prolonged uncertainty in the domestic business environment.
Unfortunately, due to the good corporate governance and dividend policy track record of these companies, many shareholders have invested large sums of money, including their own savings, in these companies.
Some analysts say that while this may be disappointing for investors looking for short-term gains, it could mean careful financial management and strategic planning by these companies, potentially leading to innovation. , argued that expansion could lead to increased investment in sustainability initiatives. In the long run, it could ultimately benefit the economy.
But shareholders argued that the losses caused them intolerable pain because they further reduced their purchasing power and exposed them to further hardship.
Furthermore, shareholders expressed doubts about the sustainability of investments in these companies and the continuity of some of the companies in the Nigerian market.
Charles Abuede, research analyst at Cowley Asset Management Limited, said the listed company's decision not to pay dividends to shareholders in the 2023 financial year was due to financial constraints, an opportunity to reinvest for future growth. , said that it could depend on a variety of factors, including strategic shifts in the business. Priority.
He said this trend comes in the face of economic uncertainty that is forcing many publicly traded companies to conserve cash reserves and focus on long-term growth strategies rather than short-term returns to shareholders. , noted that this could be a sign of market caution.
Abuede added that this trend could also affect the confidence of investors and consumer spending, especially shareholders who rely on dividends as a source of income.
Gbadebo Olatokunbo, co-founder of the Noble Shareholders Association of Nigeria, said government needs to review its policies on local procurement and backward integration.
He said many indigenous companies that have been operating for more than 50 years still source 80 per cent of their raw materials from abroad.
“Research shows that many businesses in Nigeria that are around 50 years old still rely on foreign raw materials, which is bad for our economy. I urge them to start talking with their members about the disadvantages of over-reliance on foreign materials.”
The 2023 financial performance of these listed companies shows that PZ Cussons recorded a loss after tax of N74.1 billion for the year ended November 2023, from a profit of N7.7 billion achieved in the same period. It was done. The period is 2022.
Similarly, Notre Chemical Industries, a fertilizer and agribusiness company, posted a group loss after tax (LAT) of N114.2 billion for the year ended December 31, 2023, compared to a loss of N7.1 billion in the previous year. .
This is despite the company’s revenue declining from N32.3 billion in the 2022 financial year to N21.55 billion. International Breweries Ltd.’s 2023 financial results showed a loss of N70.03 billion, up from a loss of N21.63 billion declared in 2022.
The beer company also announced a pre-tax loss of N97.27 billion for the 2023 financial year, up from a pre-tax loss of N266.84 billion reported in 2022. The beer company’s loss comes on the back of an increase in net foreign exchange losses incurred in 2023 to N55.98 billion compared to the previous year. In 2022, we incurred a net foreign exchange loss of N5.11 billion.
Similarly, Nestlé posted a pre-tax loss of N104 billion in the 2023 financial year, compared to a pre-tax profit of N71 billion in the same period in 2022.
The company recorded a foreign exchange loss of N195 billion, which was the main reason for the loss position. Additionally, MTN posted an after-tax loss of his N137 billion. The company announced that this loss reduced retained earnings and shareholders' funds to -208 billion naira and -40.8 billion naira respectively.
Source: guardian.ng