The practice of generous distribution of dividends by certain companies of the Regional Stock Exchange
Abidjan Securities ( BRVM ) will be severely tested during the 2020 financial year.
of companies will indeed be marked by the consequences of covid-19 on the economy and households
in the WAEMU zone.
For the moment, the companies listed on this financial market do not seem to have deviated from their habits. 8
of them having published a net profit for the 2019 financial year, announced a
cumulative gross dividend of 227.6 billion FCFA for a cumulative net profit of 293.8 billion FCFA; what
makes a dividend yield of 77%.
In detail, the sums paid to shareholders range from 55.5% of the net profit made (Coris Bank), to
99.8% for the National Telecommunications Office (ONATEL). This way of remunerating shareholders
finds a favorable echo among short-term investors looking for attractive returns.
On average, the BRVM presents a potential return of 11.4% to its investors. It's a
investment remuneration higher than interest on deposits in the WAEMU zone that are in
average of 5.6% and those collected on public loans which are 6.5%.
This return does not necessarily reflect a solid improvement in business performance. The
cases of Ecobank Côte d'Ivoire, Onatel and Sonatel are illustrative. Ecobank Côte d'Ivoire has decided to distribute
85% of its profit, a practice to which it is accustomed, but it appears that most of its
performance in 2019 was not stellar and its net profit was inflated by the game of provisions.
As for Onatel and Sonatel, the two behemoths of mobile telephony on the BRVM , their net results
respective fell in 2019, compared to those of 2018.
The next 24 months are likely to be difficult and only companies that have put aside solid
reserves will be able to hold over the medium term, especially since we should not expect massive support from the
share of WAEMU member states, especially as the sub-region has thousands of businesses in
waiting for help.