Nigerian Mega Corporations payout 950 Billion NGN dividends in 2020

Despite the economic threats posed by the advent of the coronavirus pandemic, FY 2020 turned out to be a profitable year for many corporations.

According to combined data retrieved from the annual reports of mega corporations, the Nigerian corporate society paid more than N958 billion in dividends in 2020, up N851.9 billion in 2019 by the same companies.

Although dividend payout year on year for FY 2020 increased 13%, the profit is lesser compared to 2019 dividend payout based on dollar adjustment for exchange rate devaluation. At a dollar to naira exchange rate pf N410/$1, N958 billion amounts to $2.33 billion, while N852 billion dividend payout in 2019 adjusts to $2.36 billion at an exchange rate of N360/$1.

Nairametrics retrieved data from financial statements of companies under review – 34 of the biggest companies on the Nigerian Stock Exchange – that reported dividends paid out in their financial statements. The dividends paid out in 2020 represent a 13% increase from 2019, which suggests that these companies kept to their dividend payout commitments to shareholders despite the events that played out and impacts of the coronavirus pandemic within the year, unlike other companies. For example, at the peak of the pandemic in March 2020, companies like Julius Berger slashed dividends.

Estimates from Nairametrics showed that out of the 166 listed corporations, 9 declared bonus issues during the year compared to only 3 in the previous year, and the year before. Companies that declared script issues were mostly insurance firms as they were met with a recapitalization mandate by the National Insurance Commission.

In FY 2020, top dividend payers including Dangote Cement, MTN Nigeria, Zenith Bank Plc, and GT Bank, among others, made up over 87% of the dividends paid during the year.

Dangote Cement emerged as the highest dividend-paying company in Nigeria in 2020. The company returned N272 billion to its shareholders. Second to the cement company on the list is MTN Nigeria, accounting for N172 dividend payout, with its dividend growing by 29.5% YOY.

Zenith Bank and GT Bank topped the list as the highest dividend-paying banks with 87.9 billion and N83 billion, respectively. Following far behind are UBA and First Bank of Nigeria, with dividend payouts of N33 billion and N14.3 billion, respectively, in 2020.

Analysts expect dividend payout in 2021 to range higher than what was paid in 2020 as more companies recover from the impacts of the pandemic. Impressively, cash reserves of mega corporations were hardly impacted and corporate profits were higher despite the economic challenges.