Back-to-back skips in dividend push Desco into Z category
Desco incurred a loss of Tk125 crore in the 2024-25 fiscal with a loss per share of Tk3.15, according to its financials.
The back-to-back skipping of dividends for its shareholders has pushed Dhaka Electric Supply Company, a state-owned power sector firm, into the Z category yesterday for the first time in its history since listing in 2006.
The state-owned power distributor decided to skip dividend payments for two consecutive years — FY24 and FY25 — due to heavy losses and negative retained earnings.
Desco incurred a loss of Tk125 crore in the 2024-25 fiscal with a loss per share of Tk3.15, according to its financials.
According to its data, the power sector firm has been sinking into heavy losses for the third consecutive year, with total losses exceeding Tk1,172 crore till the 2024–25 fiscal year.
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Since its listing, the company incurred heavy losses in FY23 for the first time, its data showed.
Despite incurring losses for the last three fiscal years, the company paid a 10% cash dividend to its shareholders for FY23.
Following the consecutive failures to declare dividends, the Dhaka Stock Exchange (DSE) downgraded the company to the Z category.
As per the directive of the Bangladesh Securities and Exchange Commission (BSEC), if any listed company fails to declare dividends for two consecutive years, it will be downgraded to the Z category.
According to company sources, the state-owned power distributor has heavy loans from both international and local lenders.
The company has been facing financial trouble since the 2022–23 fiscal year.
Before that, it had continuously posted profit, and paid over 10% dividend regularly for years.
In FY23 and FY24, Desco incurred losses of over Tk500 crore each year. However, in FY25, its losses narrowed as the dollar price remained relatively stable. In FY25, it incurred a loss of Tk125 crore.
Following the publishing of its annual financials for FY25, the shares price of Desco fell by 3.67% to Tk21 each.
As of September, of its total 39.76 crore shares, the government held 67.66% stake in the company, institutional investors 23.65%, foreign investors 0.05% and the general public held 8.65%.
