3 multinational firms cut dividend to shareholders

The British American Tobacco Bangladesh, Grameenphone and RAK Ceramics Ltd have reduced the dividend payout to their shareholders for the 2019 financial year for the first time since 2014.

Among the three, the net profit of Grameenphone has increased, but it decreased for the other two companies. 

Speaking to The Business Standard, a senior official of the British American Tobacco said, "Expenses have gone up since the National Board of Revenue increased the tax. Taking all matters into consideration, a decision was made to reduce the dividend payout."

Meanwhile, RAK Ceramics' Company Secretary Shahidul Islam said, "The cost of doing business has gone up due to increased competitiveness. This in turn has decreased our profits despite increased sales. This is the reason behind the reduced dividend payout."

The Linde Bangladesh Ltd and GlaxoSmithKline (GSK) paid the highest amount of dividend in the last financial year. Among the duo, Linde has paid the largest dividend to its shareholders since 2014. Linde's business has increased as well.

Masud Khan, chairman of GSK Bangladesh, said, "The company has always paid its shareholders good dividend. For example, we paid 530 percent cash dividend in 2018 despite suffering losses."

Singer Bangladesh's dividend payout has increased along with its net profit.

Commenting on 2019 results, its Chairman Dr Fatih Kemal Ebicli Oglu said, "Singer Bangladesh's revenue has increased by an impressive 40 percent over the past two years, with net income growing more than 38 percent in that period." 

However, LafargeHolcim Cement's dividend payout has remained the same despite an increase in their net profit in 2019 financial year. The company has been paying the same amount of dividends for the past six years.

"The year 2019 was a challenging year for the cement industry. The impact of increased raw material costs and additional taxes was significant," said Rajesh Surana, chief executive officer of LafargeHolcim Bangladesh. 

He added that despite this impact, LafargeHolcim demonstrated a strong performance trend. 

"Our focus on improving operational efficiencies, driving commercial innovation and cost optimisation continues to be effective," Surana said.

A total of 13 multinational companies are listed with the Dhaka Stock Exchange (DSE). Among those, seven companies have released their financial reports, and recommended that dividends be paid for the 2019 financial year.

Share performance

The share price of all multinational companies has dropped in the DSE, following the month-long downward trend. 

Among the multinational companies that recommended the payout of dividend for the 2019 financial year, LafargeHolcim's share price has dropped by 35 percent. 

Besides, RAK Ceramics' share price has dropped by 33 percent, Grameenphone's 31 percent, British American Tobacco's 26 percent, Singer's 24 percent, Linde Bangladesh's 14 percent and GlaxoSmithKline's 11 percent.