Servair dominates BRVM with 15.5% dividend yield in 2023

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Finance

Servair dominates BRVM with 15.5% dividend yield in 2023

Friday, 26 April 2024 13:02

Servair Abidjan, a company that provides catering and cleaning services for aircraft and the Abidjan International Airport, has proposed a net dividend per share of CFA206.20 for FY2023. This represents a net yield of 15.5% based on the stock's closing price in December 2023, making it the highest dividend payout on the Abidjan-based regional stock exchange (BRVM).

Previously, Onatel, a subsidiary of Maroc Telecom, held the top spot with a net yield of 11.7% for its investors. Servair has often rewarded its shareholders with high payout ratios, with the minimum payout ratio since 2014 being 43.6%. In 2017 and 2018, the company even distributed 100% of its net profits as dividends.

The 2023 fiscal year has been a record, as Servair Abidjan plans to distribute CFA2.5 billion in dividends, which is 187.22% of its net margin of CFA1.3 billion for the period. This decision is unexpected, as the company's performance in 2023 was quite ordinary, with only a modest 4.16% increase in revenue and a net profit of CFA1.3 billion.

The generous dividend distribution was made possible because Servair Abidjan had a retained earnings balance of CFA1.8 billion. The primary beneficiaries of this policy will be Richard and Charles Ong, the founders and managers of RRj Capital. This private equity firm owns the Swiss Gate Group, which in turn owns a 76.16% stake in the Ivorian subsidiary.

The Servair stock is expected to continue its upward trend, as the 15.5% yield is nearly twice the average of the 17 dividends announced so far (8.5%). Moreover, the company operates in a growing segment, with improving prospects for air travel in Abidjan due to the arrival of new airlines and the opening of new routes.

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