The Safaricom Investment Cooperative (SIC) has frozen the dividends of its members for the year ended December 2019. This means that members will not receive any profits from their shares.
According to the cooperative, this development has been as a result of a new accounting standard that saw their profits drop by 89.3%.
This will go down in history as the first time the cooperative members have failed to receive their dividends, even after receiving a whooping KSh375 million in 2018.
However, all is not lost, seeing that the KSh217 million that the accounting standard deferred, will be included in the current financial year (2020).
The East African reports that this led to a decline in SIC’s profits to KSh55.9 million, as a result of the implementation of the International Financial Reporting Standards (IFRS 15) which recognises revenue only when the land has been sold and transferred to the customer.
Therefore, the deferred income will be recognised after the assets have been transferred to the customers.
Since its inception in 2009, Safaricom Investment Cooperative has invested in properties worth KSh5.5 billion and distributed over KSh2 billion in dividends. Currently, Safaricom Investment Co-operative has a diversified portfolio ranging from Real Estate, Agriculture, Quoted Securities among others.