Robi prefers no dividend despite profit jumps
The company preferred cash retention within the business instead of its stock market image in the first year of listing
Robi Axiata Ltd has reported a sevenfold annual profit but in the given business context the company preferred no dividend for shareholders.
Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) called Robi officials at 12pm on Tuesday at its office to explain the no dividend announcement.
Following the board meeting on Monday, the second-largest telecom operator of the country announced that its net profits per share stood at Tk0.33 for 2020, which was only Tk0.04 in 2019.
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However, the company preferred cash retention within the business instead of its stock market image in the first year of listing.
Asked about the decision for no dividend, Mohammed Shahed Alam, the company secretary of Robi Axiata Ltd, told The Business Standard, "Robi is continuously working to improve efficiency both in revenue and cost structure.
"We have improved compared to last year, and our strive will go on through digitalisation, advanced technology adoption, and innovative product offer."
The company's net operating cash flow per share has decreased to Tk5.36 against Tk6.1 a year ago.
Motiur Rahman, a retail investor holding Robi shares, said, "Robi's ongoing efforts for a stronger position in the industry is visible, but I am surprised that it did not care about the stock market investors following its record large IPO (initial public offering) last year.
"Robi is not a company that has huge retained earnings. However, I am happy that Robi has posted an annual profit out of which the company could recommend 3% cash dividends for all shareholders, or more than 10% cash dividends only for general shareholders, who own less than 10% shares."
The company is expected to elaborate its updates in an earnings call on Tuesday.
Robi floated the biggest ever IPO of Tk524 crore in 2020 and it is the largest listed company in terms of paid-up capital which grew to Tk5,238 crore after the IPO.
However, due to the low profitability, investors are paying less price for Robi shares compared to its industry competitor Grameenphone Ltd.
As a result, Robi stands at the fifth spot in terms of market capitalisation, while Grameenphone is at the top.
Ahead of the annual disclosure, Robi shares gained by 9.52% on Monday and closed at Tk46 at the Dhaka Stock Exchange.
The multinational company had sold primary shares at a face value of Tk10 each.
