Weekly Investor Update (May-WeekOne-2024)
7 min Read May 3, 2024 at 5:00 PM UTC

Monday
Servair Abidjan to pay shareholders $4.1m in market-best dividend
After experiencing a loss of 985 million FCFA in 2020,Servair, which operates in refueling, provision of meals, and cleaning services for airlines at Abidjan airport, reported a 5.28% increase in profit to 1.34 billion FCFA in 2023.Servairis offering part of its reserves as dividends to shareholders, along with its entire net profit. The total allocation amounts to 2.5 billion FCFA (over $4 million). After factoring in the 10% securities income tax (IRVM), the net dividend per share stands at 206 FCFA, more than double the previous year’s level of 82.8 FCFA.This dividend, when reported against the share price of 1,295 FCFA as of April 26, 2024, yields 15.92%, making it the highest yield on theregional BRVM marketover the past two years.
While Servair experienced growth in its financial performance, it was not directly linked to its core business. The company achieved this through a significant reduction in income tax by 22.14% to 552 million FCFA. Servair’s market capitalization of XOF 14.1 billion positions it as the 36th most valuable stock on the BRVM, accounting for around 0.173% of the equity market. Despite this, the company has maintained its commitment to providing attractive remuneration to its shareholders, evident in its substantial dividend per share and the highest dividend yield on the market.
OPay’s valuation nears $3bn on growing digital payments in Nigeria
The recent financial reports from Chinese firm Opera Limited indicate a significant increase in the valuation of its Nigerian portfolio company, OPay, despite market challenges.OPay, a leading mobile-based platform offering a range of financial services, including payments, transfers, loans, and savings, has shown resilience amid tightening liquidity and heightened investor scrutiny.Opera disclosed a 9.44% stake in OPay valued at $269 million in Q4 2023, which adjusted to $253.3 million in its latest Q1 2024 financials. This marks a substantial gain of over $100 million, suggesting that OPay’s valuation has climbed to between $2.7 billion to $2.9 billion based on Opera’s figures.
OPay’s impressive valuation surge stands out amidst the challenges facing African startups in fundraising and market penetration. The once optimistic outlook for the continent’s tech ecosystem has shifted to a more cautious investor approach, prompting startups to reassess their growth strategies. Despite these headwinds, OPay has maintained its momentum, demonstrating resilience and adaptability. Since 2018, it has experienced rapid growth, expanding its user base 4x and achieving over 60% revenue growth in 2023. Central to this success is a suite of mobile money and payment services that cater to the needs of Nigeria’s unbanked and underbanked population, positioning the company as a key player in Africa’s digital economy.
Ethiopian plastic upcycling startup Kubik gets $1.9m seed extension
Kubik, a plastic upcycling startup, has secured a $1.9 million seed extension from investors includingAfrican Renaissance Partners,Endgame Capital, andKing Philanthropies.This funding boost comes as Kubik expands its operations in Ethiopia, leveraging its factory in Addis Ababa to convert plastic waste into building materials such as bricks, columns, beams, and jambs. It uses proprietary technology to transform plastic waste into durable and cost-effective building materials.The startup plans to license this technology to accelerate its growth across Africa and eventually globally. With a focus on doubling its operations in Addis Ababa, Kubik aims to pave the way for broader expansion across Africa starting in 2025.
Plastic pollution is a major problem that causes environmental damage and risks lives. Globally, plastic garbage production is on the path to quadruple to over 1,000 million tonnes by 2060. But estimates show that the share of recycled plastic will nearly double to 17% over the same period as plastic entering waste management systems grows. In Africa, recyclers recover only 4% of the waste generated, indicating a long way to go. But with VC-backed efforts from startups like Kubik, there’s a ray of hope.
Tuesday
Nigerian banks declare huge dividends despite hike in capital base
Despite the Central Bank of Nigeria’s (CBN) push for substantial capital raises, Nigerian banks are not hesitating to distribute capital to their shareholders. Six major banks, following the publication of their 2023 audited accounts, are poised to distribute a combined N379 billion ($275 million) in dividends.That marks a significant increase from the N289.1 billion declared as final dividends the previous year (+31.3%). When interim dividends are factored in, the total climbs to N465.3 billion for 2024. Asthe CBN’s recapitalizationdeadline looms, these banks are projected to require around N4.2 trillion in fresh capital over the next two years.But rather than conservingcapitalby reducing dividends, these institutions are moving forward with rewarding their shareholders. Plans for substantial capital raise through rights issues are anticipated following these substantial dividend payouts.
One significant factor driving banks to continue paying dividends despite impending capital requirements is the CBN’s decision to exclude retained earnings from its calculation of share capital. Retained earnings represent the portion of net profits that are not distributed as dividends but reinvested in the business. With this exclusion, banks have little motivation to accumulate retained earnings. Moreover, under these circumstances, paying dividends serves a strategic purpose. It allows banks to return capital to shareholders, who may then reinvest this capital back into the banks as fresh equity. Banks may have considered paying even higher dividends than the current average dividend payout ratio of 14.15% for the six banks reviewed, given these dynamics and the potential benefits of returning capital to shareholders.
Chowdeck raises $2.5m to expand on-demand food delivery in Nigeria
Chowdeck, a Nigerian on-demand food delivery service, has secured $2.5 million in seed funding to bolster its presence in the Nigerian market. The funding will fuel its expansion into more Nigerian cities by the end of the year.Investors in the seed round includeFounderX Ventures,True Culture Funds,Hoaq Fund,Levare Ventures,Haleakala Ventures,YCombinator, andGoodwater Capital, along with angel investors.Despite being just two years old, Chowdeck claims to have rapidly amassed 500,000 users across eight Nigerian cities. Exclusive partnerships with major brands like Chicken Republic and Shoprite have further solidified its market position and contributed to its user growth.
The growth of on-demand delivery services in Nigeria has been fueled by factors such as increased smartphone and internet penetration, improved payment systems, and evolving consumer preferences. Food holds particular significance, with Nigerian households spending nearly 60% of their income on it, the highest globally. As online shopping continues to rise, Nigeria’s food delivery market has the potential to reach $2 billion to $3 billion by 2032. This promising outlook underscores the significant opportunities for growth and innovation in the country’s delivery sector.
Daba-backed BuuPass acquires South African competitor QuickBus
BuuPass, a digital travel ticketing platform based in Kenya, has bought out its Nigerian and South African competitor,QuickBus, in an undisclosed cash and stock deal.This comes just over one year after the company raised $1.3 million in pre-seed funding, which saw the participation ofseveral individual and corporate investorswhoparticipated through Daba Finance.Founded in 2016 by Sonia Kabra and Wycliffe Omondi, BuuPass has emerged as a leading bus ticketing platform, facilitating over 6 million bookings and generating more than $100 million in total sales.The acquisition significantly increases BuuPass’s monthly active users to 650,000 and expands its reach to international routes across 16 African countries, including Nigeria, Kenya, Tanzania, South Africa, Malawi, and Ghana. With this expansion, users can book major routes such as Johannesburg to Cape Town directly through BuuPass, with additional options expected by the end of Q2.
The acquisition of QuickBus by BuuPass brings significant benefits, including access to a wider user base and bus routes. QuickBus’s innovative products and features, such as its Cash Advance service, will complement BuuPass’s offerings, enhancing the overall user experience. Moreover, QuickBus’s existing integrations with major distribution channels in various regions, such as Vodaphone’s VodaPay app in South Africa, will streamline the booking process for users already familiar with these platforms.
This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients. Daba is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.






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