For the first time in its history, Bata Shoe Company (Bangladesh) Ltd has not recommended any dividend owing to a liquidity crisis triggered by a slowdown in business amid Covid-19 pandemic.
Earlier, the company had paid a 125 percent cash dividend as interim to its shareholders on the basis of its third quarter financial statement in 2019.
This interim dividend will now be considered as the final dividend for the year ended on December 31, 2019. So far, this is the lowest dividend the company has recommended.
An official of the company told The Business Standard that Bata outlets had remained closed during the government-declared general holidays put in force to curb the spread of the novel coronavirus.
After the nationwide shutdown was lifted, Bata outlets were open till 4pm only. As a result, sales volume decreased, although operating costs remained the same, he added.
"Therefore, our cash flow scenario did not support the paying out of cash dividends as final dividends for the year 2019."
At the end of 2019, the company's net operating cash flow per share was Tk68.66, which was Tk5.88 negative at the end of March, 2020.
Bata posted a 50 percent decline in its net profit to Tk49.39 crore last year. Its earnings per share stood at Tk36.11.
However, in 2017, the footwear manufacturer posted a net profit of Tk115 crore. It gave out a 335 percent cash dividend to its shareholders that year.
Despite its net profit coming down to Tk99 crore in 2018, Bata gave out a 345 percent cash dividend to its shareholders that year.
Meanwhile, in the first quarter of the current financial year, the company witnessed an 8 percent fall in sales to reach Tk163.68 crore. During this period, the net profit also went down by 37 percent to Tk2.83 crore and earnings per share stood at Tk2.07.
On Thursday, the closing price of the company's each share was Tk693.20 at the Dhaka Stock Exchange, while its highest price was Tk1,047 within the last one year.
The company, listed with the share market in 1985, has a paid-up capital of Tk14 crore.
Bata UK holds 70 percent of the total shares of Bata Shoe Company (Bangladesh) Limited.
Institutional, foreign and general investors hold 18.97 percent, 1.94 percent and 9.09 percent shares, in that order, of the company.