Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Having paid a decade-low dividend last year, British American Tobacco (BAT) Bangladesh has decided to provide three-year-high dividends for 2024.
With a 150 per cent final dividend declared for the year on Thursday, it is going to pay 300 per cent cash dividends for the year.
The dividends amount to nearly 98 per cent of the profit earned after tax in the year, including a 150 per cent interim cash dividend already paid.
However, the cigarette manufacturer's earnings per share (EPS) stood at Tk 32.42 for 2024, down from Tk 33.11 the year before, according to a stock exchange filing on Thursday.
Investors will get Tk 30 per share from earnings of Tk 32.42 per share during the year.
At present, BAT Bangladesh's total number of shares is 540 million. That means the tobacco manufacturer will disburse Tk 16.20 billion in dividend to its shareholders.
Due to higher dividend declaration, BAT's dividend yield went up to 8.58 per cent for 2024, highest since 2009, when its dividend yield was 9.54 per cent.
The return on investment promised by the company is likely to regain confidence of shareholders who were unhappy with the cash dividends paid for 2023.
Multinational companies are decelerating higher-than-expected dividends for 2024 as the dollar crisis eased to some extent.
Recently, Grameenphone declared record 330 per cent cash dividends for 2024 after paying a 13-year-low dividend for 2023.
Most multinational companies provided low dividends for 2023 despite consistent financial performance as it was difficult to repatriate dividends due to the dollar crisis.
Presently, the dollar crisis lessened, encouraging multinational companies to go for high dividends.
The tobacco leader made a profit of Tk 17.51 billion in 2024, a 2 percent drop from the previous year.
The company earned a lower profit this year, compared to the previous year, due to higher finance expenses and lower leaf exports.
It managed to offset some of the costs by increasing sale prices but failed to maintain profit growth amid rising inflation and higher finance expenses, said an official of the company, requesting not to be named.
BAT Bangladesh will hold its annual general meeting (AGM) on March 25. The record date for entitlement of the dividends is February 26.
The net operating cash flow per share, a measure of the company's ability to generate cash from its operations, jumped to 32.07 per share in 2024 from Tk 18.90 per share a year ago, mainly for higher collection.
The net asset value, which refers to the excess of total assets over total liabilities, reached Tk 106.88 per share, up from Tk 99.33 per share in December 2023.
The company is yet to disclose the annual revenue for 2024. Its nine-month gross revenue grew 5 per cent year-on-year to Tk 308.4 billion in the period through September last year.
Company secretary Syed Afzal Hossain could not be reached for comments.
BAT Bangladesh has secured a steady business growth in domestic sales as factors, such as high inflation and price hikes, could not stop the buying habits of smokers, market analysts say.
There is also a huge scope of cigarette and tobacco leaf exports to the international market, while the domestic demand has also been growing. Keeping pace with that, BAT has been expanding capacity every year.
The tobacco manufacturer invested Tk 283.8 million last month to increase production capacity to meet the growing demand for cigarettes.
BAT Bangladesh has invested more than Tk 12 billion in phases in the past four years to enhance its production capacity.
BAT markets various brands namely Benson & Hedges, John Player Gold Leaf, Capstan, Star, Royals, Lucky Strike, Derby, Pilot, Flag and Hollywood.
BAT has factories located in Dhaka and Savar, a green leaf threshing plant in Kushtia, and a green leaf re-drying plant in Manikganj.
Despite the higher dividend, the stock fell 0.91 per cent to Tk 350.1 per share on Thursday on the Dhaka Stock Exchange.