Olympic Industries declares low dividend despite profit growth

Olympic Industries secured an 18 per cent growth in profit to Tk 1.83 billion in FY24 over the previous year, riding on higher sales and efficient cost management.
Despite the profit growth, the board of directors recommended a 10 per cent cash dividend for FY24, whereas the company paid a record 60 per cent cash dividend for the year before.
That means the company will pay Tk 1 for each share from a profit of Tk 9.17 per share in the year. It, however, did not say why such a low dividend was recommended.
The country's leading biscuit manufacturer's earnings per share (EPS) rose to Tk 9.17 in FY24, from Tk 7.78 the year before, according to the company's disclosure of financial results on Sunday.
EBL Securities, in its equity note on Olympic, stated that the company had made significant investments to enter major segments such as instant noodles, dry cakes, soft cakes, chocolate-enrobed wafers, filled candies, toffees, toasts, and savory snacks.
These investments clearly point to the company's expansion strategy, EBL noted.
Company secretary Mintu Kumar Das could not be reached for comments.
Meanwhile, Olympic Industries invested around Tk 3.60 billion in the past six years for factory expansion, aiming to diversify its business and establish a strong presence across the confectionery industry.
The company's annual sales rose slightly by 0.54 per cent year-on-year to Tk 25.93 billion in FY24, despite persisting macroeconomic challenges and high inflationary pressure.
Higher sales and significantly lower finance costs, largely due to lower impact from currency devaluation, helped the company secure a profit growth.
Olympic managed to offset the costs partially by adjusting sales prices, which also boosted profit.
The management expressed optimism about the growth momentum, anticipating healthier profits in the coming years, riding on an improvement in the dollar crisis and efficient management.
The net operating cash flow per share, which indicates a company's ability to generate cash from its operations, soared to 18.76 per share in FY24 from Tk 6.95 in the previous year, mainly due to higher collection from customers.
The company will hold its annual general meeting on December 12 and the record date for entitlement of dividends is November 17.
Listed in 1989, Olympic Industries is the market leader, capturing more than one-fourth share of the branded biscuit market, and holds the second position in the battery market in Bangladesh.
The leading biscuit manufacturer has remained consistent in financial performance and is considered one of the best performing blue-chip stocks.
Its stock had never been stuck on the floor as it was the first choice among investors, including foreign investors. Overseas investors held a 23.96 per cent stake in Olympic Industries as of July this year.
However, the stock dropped 2.64 per cent to close at Tk 157.5 per share on the Dhaka bourse on Sunday.
The local biscuit industry expanded by about 15 per cent annually over the past few years, according to EBL Securities.
The market for biscuits is worth Tk 50 billion to Tk 60 billion, with large and well-known brands taking up a major share, according to industry insiders.

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