Poor dividend makes Robi the worst stock at Dhaka bourse

Robi Axiata Limited turned into the worst stock at the Dhaka Stock Exchange (DSE) on Wednesday after its investors, disappointed by its poor dividends for 2021, opted to get rid of their holdings in the company.

The country's second-largest mobile network operator faced the highest price correction of 3.59% and its shares closed at Tk34.9 each at DSE.

According to a top official of a brokerage firm, Robi's declaration of a mere 2% cash dividend on Tuesday evening prompted the investors to sell its shares the next day.

Earlier, Robi had paid a 3% interim cash dividend to its shareholders. The company's total cash dividend for 2021 stood at 5% but its payout is 145% higher compared to its net profit for the year.

At a press briefing on Wednesday, Robi's acting chief executive officer Riyaaz Rasheed said, "We are deeply worried about the severe damage caused by the 2% minimum turnover tax. Had we not been subject to this unjustified tax, our profit could have been Tk343 crore, instead of Tk180 crore. In other words, we could have made Tk163 crore more profit for our shareholders in 2021 if the 2% minimum turnover tax was removed."

In an attempt to come out of this situation, the official in a presentation has sought some exemptions such as – rationalising sector-specific discriminatory taxes, converging licensing regime, resolving Dense Wavelength Division Multiplexing (DWDM) issue, allowing active infrastructure sharing, and rationalising spectrum pricing – from the regulators.

In 2021, despite its revenue growing 7.6% to Tk8,142 crore, Robi's profitability declined because the company was overburdened by the tax.

Commenting on the financial performance, Robi's acting CEO said, "We are happy to see our growth strategy consistently working in the market. Robi made the highest revenue growth for the third consecutive year in 2021. With the consolidation of the 4G leadership position, we are on track with our digital transformation journey powered by innovation."

Robi's 4G leadership position further consolidated in 2021 with 44.4% of its total subscribers being 4G users. Around 73.7% of Robi's subscriber base were data subscribers in 2021, which was the industry's highest.

Compared to 2020, Robi's 4G subscriber base grew by 43.8% in 2021 to 2.38 crore.

In 2021, Robi's overall subscriber base grew by 5.4% to 5.37 crore compared to 2020, representing 29.7% of the subscriber market share.

On the other hand, the data subscriber base grew by 12.3% to 3.96 crore.

In November 2020, Robi collected Tk523.7 crore through an initial public offering (IPO) and had decided to invest Tk515 crore of the amount for network expansion.