BAT Bangladesh declares lowest div in a decade

British American Tobacco (BAT) Bangladesh declared a 100 per cent cash dividend for 2023, the lowest in over a decade, despite maintaining almost the same net profit as in the previous year.
The multinational tobacco manufacturer's profit stood at Tk 17.88 billion in 2023, slightly up from Tk 17.87 billion in 2022, according to a disclosure published on Thursday. However, the cash dividend declared represents only 30 per cent of the total profit.
The dividend declaration came at a board meeting held on Thursday evening.
According to the disclosure, the company's earnings per share (EPS) stood at Tk 33.11 in 2023 as against Tk 33.10 in the year before.
BAT Bangladesh will hold its annual general meeting (AGM) on March 28 and the record date for entitlement of the dividend is on March 3.
The company's consolidated net operating cash flow, a measure of a company's ability to generate cash from its operations, dropped sharply by 63 per cent year-on-year to Tk 18.90 per share in 2023.
The net asset value, which refers to the excess of total assets over total liabilities, reached Tk 99.33 per share for 2023, up from Tk 76.27 in the previous year.
The ongoing dollar crisis might be a reason behind the recommendation of a lower cash dividend, said a leading stockbroker.
"Many companies are trying to retain profits due to the increase in business costs brought on by high inflation," he explained.
Many multinational companies are facing challenges repatriating dividend amounts due to the greenback crisis which might discourage them from declaring higher cash dividends, he added.
BAT Bangladesh did not publish detailed annual financial statements as yet. As per available data, its nine-month turnover grew 10 per cent year-on-year to Tk 67.93 billion for the period through September last year. And domestic cigarette sales rose 10 per cent year-on-year to Tk 64.93 billion, while leaf exports jumped 16 per cent to Tk 300 million during January-September last year.
BAT has secured a steady business growth as factors like high inflation and price hikes could not sway the buying habits of smokers, market analysts say.
There is 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.
BAT exports cigarettes to many countries, including China and the Maldives. China is a huge market for cigarettes.
Tobacco green leaf is exported to Belgium, Spain, Belarus, Lithuania, Georgia, the Netherlands, Turkey, the United Arab Emirates, Italy, Poland, Germany, UK, United States, and South Africa.
BAT Bangladesh has invested more than Tk 12 billion in phases in the past three years to enhance its production capacity to meet the growing demand.
Bangladesh is the eighth largest in terms of production while BAT Bangladesh is the second largest listed company in terms of market capitalisation. Its total market value stood at Tk 280 billion as on Thursday.
The cigarette maker 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 steady business growth, the company's share has been languishing at the floor price of Tk 518.70 per share on the Dhaka Stock Exchange since September 2022.
The company's floor price would be lifted on March 4 after the record date, according to the securities regulator's recent decision.

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