Airtel Uganda shareholders have reason to celebrate, with the telecom giant announcing a record interim dividend of Shs2.5 per share, totaling Shs100 billion, for the quarter ending December 31, 2024. This marks the highest payout since the company’s Initial Public Offering (IPO) in late 2023.
Godfrey Bakibinga, Airtel Uganda’s interim company secretary, confirmed that shareholders on record as of April 8, 2025 (with an effective date of April 2, 2025) will receive their payouts by April 28, 2025.
For the full year 2024, Airtel Uganda’s total dividend reaches Shs7.88 per share, representing a 9.97 percent yield based on the current stock price of Shs79.00 (as of February 20, 2025). The latest dividend alone translates to a 3.16 percent yield. Interestingly, the company’s stock price remained stable in the two days following the dividend announcement.
Since its November 2023 listing, Airtel Uganda has distributed a total of Shs477 billion or Shs11.93 per share through six dividend payouts, with the latest being the most substantial.
Market analysts attribute this record-breaking dividend to Airtel Uganda’s robust financial performance. The company’s profit after tax increased from Shs297 billion in 2023 to Shs317 billion in 2024, driven by revenue growth from Shs1.78 trillion to Shs1.98 trillion over the same period.
Airtel’s improved profitability isn’t solely due to increased earnings. The company also implemented cost optimization strategies, reducing expenses in areas such as network operations, access charges, license fees, spectrum usage, sales and marketing, and depreciation. Total expenses increased only slightly from Shs1.19 trillion in 2023 to Shs1.4 trillion in 2024, primarily due to network costs and depreciation.
Airtel also tightened its capital expenditure, reducing spending from Shs41.4 billion to Shs29.1 billion. While spending on intangible assets (like software) decreased, investments in property, plant, equipment, and right-of-use assets increased slightly to bolster infrastructure.
These financial strategies resulted in a jump in retained earnings from Shs86.7 billion in 2023 to Shs102.4 billion in 2024, providing the company with more internal capital.
However, the company’s liabilities also increased from Shs2.2 trillion to Shs2.6 trillion, mainly due to higher lease liabilities, deferred tax obligations, and financial derivatives. Despite this, total assets also grew from Shs2.2 trillion to Shs2.4 trillion, largely thanks to investments in physical infrastructure. Notably, the company’s borrowings decreased significantly from Shs300 billion in 2023 to just Shs35 billion in 2024.
Despite the positive results, some questions remain unanswered. Airtel Uganda has yet to release detailed financial statements explaining key shifts, such as increased interest on existing loans, higher investments in plant and equipment, and the sustainability of its aggressive dividend payouts given the need to manage liabilities and reinvest in the business. The key concern is whether Airtel can balance rewarding shareholders while maintaining competitiveness in Uganda’s telecom market, where infrastructure investment is critical.
Airtel’s strong profit figures are now approaching those of MTN Uganda, even with MTN’s mobile money division still listed. With MTN expected to separate its mobile money business later this year, Airtel could gain a competitive edge in post-tax profits, creating more room for investment and improved cash flow.
Investors are responding positively. After a bearish period following its 2023 listing, Airtel’s stock price rebounded on January 2, 2025, rising from Shs58 to Shs79 by Thursday—a promising move towards its initial listing price of Shs100 per share.
David Bateme, team lead, new business at Crested Capital, observed, “Airtel’s dividend is improving because its financials are improving. The stock’s ups and downs mirror what MTN experienced after its listing. Investors should remember that dividend yield moves in relation to share price.”