Tk17cr profit, yet Associated Oxygen declares only Tk1cr dividend

The board of directors of Associated Oxygen Limited, despite the company making a profit of Tk17.46 crore in the 2022-23 fiscal year, declared only Tk1.1 crore as cash dividend to shareholders, which is nearly 6% of the profit.

According to the Dhaka Stock Exchange (DSE), the publicly listed Chattogram-based company has around 11 crore shares. For FY23, it declared only 1% cash dividend.

In the fiscal 2021-22, Associated Oxygen paid a 10% cash dividend.

In FY23, the company's revenue fell 10% year-on-year to Tk48.11 crore, while its profit fell by 5% compared to the previous fiscal.

Market insiders stated the dividend payout is absurd as the company is depriving its investors by retaining a lion's share of the profit.

For shareholders' approval of the dividend and annual report, the company has scheduled an annual general meeting (AGM) on 30 January. The record date is 21 January.

Last year, DSE officials on contacting the company on the pretext of buying products, learned that the company's factory had been closed for several months.

The Bangladesh Securities and Exchange Commission (BSEC) then formed an investigation committee to review financial reports and other issues of Associated Oxygen.

Md Delwar Hossain, chief financial officer at Associated Oxygen, earlier told TBS "Purchase orders from shipyards, who are our main clients, have dropped."

"Although the factory is currently operating and we have the capacity to run it fully, we are only producing as per the buy orders," he added.

Associated Oxygen, which has been producing and supplying gas products for the last three decades, raised Tk15 crore from the capital market in 2020 to expand its business.

In November 2022, the company planned to make a fresh investment of Tk250 crore after raising the money through a convertible bond. 

The company entered into an agreement with Janata Capital and Investment Limited as the fund arranger. But it has not secured the BSEC approval for the bond yet.

The last trading share price of Associated Oxygen at the DSE was Tk36.50 per share on Thursday.

As of 31 July 2023, sponsors and directors jointly held 30.65%, institutions 10.59%, foreign investors 0.29%, and general investors 58.47% of the company shares.