83 local firms declare higher dividends as pandemic eases

Bangladesh Lamps Limited, an electric bulb manufacturer, declared 10% cash dividend for FY20 as it suffered losses due to the raging pandemic, but the company declared 20% cash dividend for FY21 as it returned to profit.

Like Bangladesh Lamps, 83 local companies listed on stock exchanges from the manufacturing and service sectors have declared higher dividends for FY21 compared to the previous fiscal year.

According to the Dhaka Stock Exchange (DSE), 180 of the local companies that maintain the July-June fiscal year have published financial statements for FY21 till mid-November.

Thirty-five of these companies have declared lower dividends as they posted less profit compared to the previous fiscal year, while 32 declared zero dividend due to their weak financial position. The remaining companies declared a similar amount of dividend as they did in the last fiscal year.

The financial sector such as banks, non-banking financial institutions and insurances, mutual funds, and foreign companies are not among these companies as they maintain a different time period for a fiscal year.

After facing trouble last year, most of the local companies have been bouncing back in business beating the pandemic shock, said the industry insiders.

The situation has not returned to the pre-pandemic level, but a sign of recovering from the Covid-19 shock is evident in many of the companies' performances.

M Mazedul Islam, company secretary of Bashundhara Paper Mills, told TBS, "The (paper) industry faced a crisis due to the lower demand of products, but now sales and business have grown significantly after reopening the economy."

"After reopening educational institutions, the paper industry has made a comeback as demand surged," he added.

United Power to pay the highest dividend among locals

Among the local companies that have so far published their financial statement for FY21, 118 declared dividends up to 20%, while 21 companies declared dividends between 21% and 49%.

Only two local companies have declared more than 100% dividends – United Power Generation and Distribution Company (UPGDC) and Renata Limited.

United Power declared a 170% cash dividend – the highest among the local companies – for FY21. In FY20, their dividend was 155% – 145% cash and 10% stock.

The drugmaker Renata Limited will pay the second-highest dividend for FY21. It will pay 155% dividend – 145% cash and 10% stock.

In the previous fiscal year, it declared 140% dividend – 130% cash and 10% stock.

Meanwhile, seven companies have declared 50% to 100% dividend for FY21: ACI Limited, Square Pharmaceuticals, MJL Bangladesh, Olympic Industries, Aramit Ltd, Kohinoor Chemicals, and Pharma Aid.

In FY20, only five companies paid more than 50% dividend, while 127 companies declared less than 50% dividend. Among them, 114 companies declared up to 20% and 13 companies declared 21-49% dividend.

Thirty-nine companies did not pay any dividends in FY20 as they incurred losses.