Dividends paid out to multinationals for their controlling stakes in Nairobi Securities Exchange-listed firms are set to drop by 21 percent this year as a few blue-chips reduced their payouts by significant amounts.
Multinational firms including Vodacom Group, Diageo Plc, WPP Plc and BAT Plc have received or are set to get a total of Sh38.4 billion based on the latest distribution announcements.
This will be Sh10.2 billion lower compared to last year’s payout of Sh48.6 billion, but a boost to the cash flow of the mainly European-based multinationals who are freezing dividends and shoring up reserves as the coronavirus pandemic threatens to tip the world into a deep recession.
The reduction could be mitigated if East African Breweries Limited (EABL) pays a final dividend for the year ending June. The brewer last week issued a profit warning, suggesting that its net earnings for the year ending June are likely to decline by 25 percent compared to the previous period, hurt by coronavirus.
