The distribution of generous dividends on the regional stock market BRVM will be severely hampered this year, due to the impact of the current covid-19 pandemic.

For the time being, companies listed on this market are still working the traditional way. Eight of them have posted a positive net profit for the 2019 financial year and announced a cumulative gross dividend of CFA227.6 billion for a cumulative net profit of CFA293.8 billion; which makes a dividend yield of 77%.

Sums paid to shareholders range from 55.5% of the net profit achieved (Coris Bank), to 99.8% for the National Telecommunications Office (ONATEL). This way of remunerating shareholders is well received by short-term investors looking for attractive returns.

On average, BRVM offers its investors a potential return of 11.4%. This is a higher investment return than the interest on deposits in the WAEMU zone, which averages 5.6%, and the interest earned on public bonds, which averages 6.5%. This return does not necessarily reflect a solid improvement in corporate performance. The cases of Ecobank Côte d'Ivoire, Onatel and Sonatel are illustrative. Ecobank Côte d'Ivoire has decided to distribute 85% of its profits, a practice to which it is accustomed. However, it appears that most of its performance in 2019 was not brilliant and its net profit was inflated by provisions. For Onatel and Sonatel, the two major mobile operators on the BRVM, their net results were down in 2019, compared to 2018.

The next 24 months are likely to be difficult, and only companies that have set aside solid reserves will be able to hold out over the medium term, especially since massive support from WAEMU member states cannot be expected as the sub-region has thousands of companies waiting for help.

Idriss Linge