Salvo Chemical declares 2.5% dividend for FY25

Salvo Chemical Industries Ltd has declared a 2.5% cash dividend for the financial year ended 30 June 2025, according to a price-sensitive disclosure filed with the Dhaka Stock Exchange (DSE) today.

To approve the dividend, the company's annual general meeting (AGM) will be held on 29 September at 10:30 am in a hybrid format at the Institution of Diploma Engineers Bangladesh (IDEB) Bhaban, Dhaka. The record date has been set for 8 September.

For FY25, Salvo Chemicals reported earnings per share (EPS) of Tk0.58, lowering 65% from Tk1.66 in FY24. Its net asset value (NAV) per share stands at Tk16.57, slightly up from Tk16.24 a year earlier, while net operating cash flow per share (NOCFPS) increased to Tk5.68 from Tk5.43.

Following the dividend declaration, shares of the company—trading under the B category as it paid less than 5% dividend—rose sharply by 5.77% to close at Tk27.50 on the DSE. The payout is unchanged from FY24, when shareholders also received a 2.5% cash dividend.

However, regulatory concerns continue to weigh on the company. 

According to its auditor's report, Salvo Chemicals has failed to meet the Bangladesh Securities and Exchange Commission's (BSEC) requirement for sponsors and directors to jointly hold at least 30% of the company's shares, as per a notification issued in May 2019. The company's current sponsor-director holding stands at 25.18%.

The BSEC, through a letter issued on 7 March 2024, directed Salvo to comply within one year, either by acquiring additional shares from the market or issuing new ones, in line with a strategic plan and relevant securities regulations.

In response, the company convened an Extraordinary General Meeting (EGM) on 18 July 2024, where it approved raising Tk6.40 crore in paid-up capital through the issuance of 64 lakh ordinary shares at Tk16 each (including a Tk6 premium). The shares will be issued to existing sponsors and directors via private placement. While shareholders approved the plan, the BSEC rejected it on 7 October 2024.

Salvo later reapplied to the regulator in December 2024, but the request was again declined on 20 April this year. The company had intended to allocate Tk4.20 crore to strengthen its working capital and Tk2.20 crore to finance imported machinery, aiming to ensure smoother production and uninterrupted operations.

Salvo Chemicals, a key player in the country's bulk chemical market, specialises in the production of sulphuric acid and battery-grade water. According to the company's website, it is now one of the leading sulphuric acid manufacturers in Bangladesh.