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Dhaka Tribune

GP dividend higher than profit

Update : 11 Feb 2014, 07:18 PM

Grameenphone has recommended distributing 28.6% higher dividend than the net profit the company earned in 2013.

It reported an after tax profit of over Tk1,470 crore in the year, about 16% down from the previous year, but recommended dividend of Tk1,890.42 crore, according to financial disclosure made at a press conference in Dhaka yesterday.

“It may not be sustainable in the long run that a company would be able to maintain higher dividend than profit as they are giving it from retained earnings,” said Khairul Bashar, an analyst at Asian Tiger Capital Partners.

The earnings per share (EPS) of the country’s largest mobile phone operator in 2013 stood at Tk10.89, but their dividend stands at Tk14. In 2012, the EPS was Tk12.96.

The company, having only 10% general shareholders, would seek approval to the dividend by the shareholders at the annual general meeting scheduled to be held at Bashundhara Convention Center-2, Baridhara on April 9.

Mother company Telenor holds 55.8% stake and Grameen Telecom 34.2%.

It recommended 50% cash dividend on Monday, making a total of 140% cash dividend for the last year. Earlier, they distributed an interim cash dividend of 90%.

Not only in 2013, lone listed mobile phone operator also distributed higher dividend than their profits bagged in last couple of years.

Senior executives of the operator said they were spending extra money from their reserve and surplus fund, which was Tk1,411 crore after 2012 and would come down to Tk991 crore after the next AGM. Three years back, the fund was more than Tk2,500 crore.

“We have a dividend policy. We have distributed it according to the policy,” said Mainur Rahaman Bhuiyan, acting chief financial officer (CFO) of Grameenphone, replying to a question at the press conference.

As they have a handsome amount of reserve and surplus fund, it is possible for them to distribute more dividends than profit, he told the Dhaka Tribune.

In 2011, Grameenphone earned Tk1,750 core profit and distributed cash dividend of Tk1,890 crore.

In 2011, the operators net profit stood at Tk1,889 crore and they distributed the highest amount of cash dividend Tk2,768 crore or 205%.

In 2009, Grameenphone enlisted as the biggest company in the stock market and showed profit of TK1,071 crore in 2010, but distributed Tk1,620 as cash dividend.

At the press conference Grameenphone declared Tk9,660 crore in annual revenue for 2013 with 5.1% growth from last year.

They said this growth momentum has been achieved amidst disruptions and lower economic activities in the run-up to the national election.

The growth is accredited by new customer acquisition, usage increase and competitive value for money market offerings.

Higher device sales with the advent of 3G era, growth in both local and international interconnection minutes, wholesale and financial services also contributed.

Making a presentation at the press conference, Grameenphone CEO Vivek Sood said: “On previous year we acquired 3G spectrum, restored revenue growth momentum, revitalised market machineries and partnering with Accenture to gain competitive advantage in IT.”

He said, during the year, they performed as activist of challenges amidst adverse externalities, innovated with customer centric offers and steered the business in the right direction towards enhancing value for the shareholders. 

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