One of the big SOEs declares massive dividend in South Africa

Airports Company South Africa (ACSA) has declared dividends of R816 million to investors, making it one of a select few state-owned enterprises (SOEs) to do so in the last five years.  

Airports Company South Africa has declared a multi-million rand dividend to shareholders, bucking the trend of South Africa’s SOEs.

The declared dividends comprise R768 million for preference shares and R48 million for ordinary shares, which the company said marked a significant milestone in its recovery and financial journey. 

“This achievement places ACSA among the select few state-owned companies in South Africa that have successfully paid dividends to shareholders, underscoring its robust financial health and strategic management,” said ACSA CEO Ms Mpumi Mpofu.  

“Dividends are a significant source of fiscal revenue to investors, particularly the government, which holds more than 74% stake in the company.”

ACSA is one of the few state-owned enterprises under Schedule II of the Public Finance Management Act (PFMA) that has been able to pay dividends over the last five years.

Since the 2019/20 financial year, Schedule II SOEs have paid over R1.3 billion in dividends.

ACSA contributed more than R873 million (including dividends on preference share) over the last five years.

Looking at the assessment of Annual Reports and Financial Statements, ACSA said that it is unclear whether other SOEs have declared dividends on preference.

Based on the assessment of Annual Reports and Financial Statements, it is unclear whether other SOEs have declared dividends on preference shares. 

“Declaring dividends to our investors is a testament to ACSA’s strong financial performance and our dedication to creating sustainable value. It is a demonstration of an efficient and effective use of public funds to the markets, the public and the government,” said Mpofu.

“As one of the few state-owned companies to achieve this milestone, we are setting a benchmark for excellence and financial stewardship of state funds.

ACSA said that SOEs are crucial in advancing the country’s development goals by providing public goods and services.

ACSA also announced that board chairman Dr Sandile Nogxina is retiring.

“He (Nogxina) hands over the baton at a time when the company has regained its financial health, reporting an increase in revenue, up 16%, from R6 billion in 2022/23 to R7 billion in 2023/24,” she added.  

Looking to the future, ACSA aims to maintain its growth trajectory and financial stability. The company will also explore new investment opportunities.

For context

It is worth comparing ACSA’s dividend to that of other SOEs to understand how impressive its performance is.

Responding in a Parliamentary Q&A earlier this year, the late Public Enterprises Minister Pravin Gordhan revealed that the government spent R282.6 billion in ‘capital investments’ into SOEs across the country from 2019 to 2024, with Eskom receiving the lion share at R234 billion.

However, only one SOE, SAFCOL, could declare a dividend, which amounted to R1 million.

A breakdown of the capital investments and dividends over the five years can be found below:

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