MNCs cash dividend payout drops 31% in 2023
Market insiders said that the dividend amount of the multinational companies is decreasing due to increased business costs
The cash dividend payout of ten multinational companies (MNCs) in Bangladesh dropped by 31% in 2023 compared to the previous year, as they faced difficulties in foreign currency transactions for remitting money to foreign shareholders.
Though there are 13 MNCs listed on the country's stock exchanges, only 9 declared cash dividends for the last year, while one declared an interim dividend based on quarterly financials.
The 10 firms declared to pay a total of Tk3,552 crore to their shareholders, which accounted for 56% of their total profits.
In 2022, the 10 MNCs paid a total of Tk5,158 crore as dividend, which accounted for 91% of total profits. The dividend payout was Tk5,685 crore in 2021.
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Market insiders said that the dividend amount of the multinational companies is decreasing due to increased business costs as well as problems in repatriation of money. According to them, in 2022, several companies were facing problems in foreign currency transactions with their related parties including dividends and royalty fees.
Among the listed MNCs that had trouble sending money abroad due to the dollar crunch were Bata Shoe Bangladesh, HeidelbergCement Bangladesh, Marico Bangladesh, British American Tobacco Bangladesh Company Limited (BATBC), Reckitt Benckiser Bangladesh, Linde Bangladesh and Unilever Consumer Care.
Because of this, Grameenphone – the largest mobile operator of Bangladesh – has declared a 125% cash dividend for its shareholders for 2023, which is the lowest since 2010.
The dividend pay-out ratio for 2023 represents 51.03% of its total profit of Tk3,306 crore. In 2022, it had paid 98.72% of its total profit.
BAT Bangladesh also halved its cash dividend to 100% for the year 2023, marking the lowest rate in over a decade.
The multinational tobacco manufacturer reported a profit of Tk1,788 crore in 2023, a marginal increase from Tk1,787 crore in 2022. Despite the similar profit, the company declared a dividend representing only 30% of the last year's total profit.
A senior official of a multinational company, seeking anonymity, said that the MNCs are facing problems in repatriating dividends due to foreign currency shortage. So, it is better to reinvest the money here (locally) instead of paying more dividends, the official added.
For example, Marico Bangladesh has taken approval from the Bangladesh Securities and Exchange Commission to use the dividend money as working capital due to difficulties in repatriating it (dividend money) to foreign investors, the official further said.
The dollar crisis in the country began in June 2021 and intensified in the following year. This crisis persisted throughout 2023 and is still going on.
A top official of a listed multinational company, who wished to remain anonymous, stated that for the past two years, nearly everyone has been encountering difficulties in repatriating dividends.
In light of this situation, the head office had advised against paying dividends. However, amid concerns that local investors may suffer and that this could have a negative impact on the capital market, firms ultimately declared dividends, the official further said.
