Uganda Clays Pays Half A Shilling A Share Dividend

Shareholders of Uganda Clays Limited will get half a Shilling for every share they hold, as a return on their investment for the year ended December 2022.

In the Post Annual General Meeting notice issued to the markets Tuesday, the company secretary, Lex Advocates, said the company will proceed to pay the final dividend which was declared and approved by the shareholders on Friday.

This means each shareholder will receive three times less than they received for 2021 of 1.5 Shillings for every share held, which was also a record high for the company in years. It also means that an investor with 1,000 shares will walk away with 500 Shillings for the year 2022.

UCL is divided into 900,000,000 shares, meaning the total dividend is 450 million Shillings.

The fall in the dividend is mainly due to the fall in profit for the year, but also the need for cash by the company to expand production and pay off debts. Profits for the year fell by almost half to Shillings 2.44 billion from Shillings 5.92 billion registered in 2021, a scenario attributed to lower revenues.

“In arriving at this recommendation, the board took into consideration the dividend policy of the company and the need to retain substantial cash for capital expenditure to improve production capacity at both factory plants and to improve product quality,” said Martin Kasekende, the board chairperson. He also attributed the poorer performance to the rise in prices of imported inputs and equipment.

The Company’s revenues fell slightly from Shillings 36.686 billion in 2021 to Shillings 36.616 billion partly due to reduced sales after production was disrupted by the breakdown of equipment, according to Kasekende. On top of planning to buy new state-of-the-art equipment, the company hopes that the easing effects of the COVID-19 pandemic and of the Ukraine-Russia war will lead to better business.

The company also confirmed the conclusion of negotiations to reschedule a 20.6 billion Shilling loan from the National Social Security Fund, NSSF.

Mathias Nalyanya, the company secretary said they will clear the debt in five years in 10 equal installments starting January 2025.

Uganda Clays Limited was listed on the Uganda Securities Exchange (USE) in January 2000 and is currently the 15th most valuable stock with a market capitalization of 13.5 billion Shillings or about 0.077 percent of the USE equity market.

Currently, the share price of UCL is 15.0 Shillings as per the last trading session, having begun the year with a share price of 17.20 Shillings, a 12.8 percent fall.

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