Despite a 10 per cent profit increase year-on-year to Tk 33.06 billion in 2023, Grameenphone's dividend payout ratio for the year will be the lowest in four years.
One factor that stands out as the primary reason is a spending of Tk 17.69 billion on dispute resolutions in 2023.
GP made payments to the Bangladesh Telecommunication Regulatory Commission (BTRC) in June last year as per a court order in a case relating to VAT mechanism and spectrum assignment fee for 2G licence renewal.
GP and the National Board of Revenue settled all income tax-related disputes for the assessment years of 2007-2008 and 2019-2020 through the alternative dispute resolution (ADR) process and obtained a tax clearance certificate in June 2023.
"Despite positive developments on dispute resolutions, the extra payment strains GP's cash position as it comes on top of regular payments," read the financial statement made for the period of January-June last year.
In consequence, GP declared a 125 per cent cash dividend for 2023, lowest in 13 years. That amounts to 51.03 per cent or Tk 16.87 billion out of its total profit of Tk 33.06 billion.
The company's dividend payout ratio was lower than this in 2019 when it paid 50.86 per cent of its profit of Tk 34.52 billion.
In 2019, the company had also paid Tk 20 billion to the telecom regulator, complying with an apex court order against outstanding audit claims.
Usually, the largest mobile phone operator gives both interim and final cash dividends every year. The average payout ratio is 80 per cent in the last 5 years.
But the company did not declare any interim cash dividend in 2023 for the first time since its listing in the stock market in 2009.
GP cited macro-economic challenges for recommending low dividends in its latest earnings disclosure.
On top of the extra payment, the dollar crisis might be a reason behind the lower cash dividends recommended, said Minhaz Mannan Emon, ex-director of the Dhaka Stock Exchange.
"Many companies are trying to retain profits due to the increase in business costs brought on by high inflation," said Mr Emon, also managing director of BLI Securities.
Many multinational companies are facing problems in repatriating dividends due to the greenback crisis, which might discourage them from paying high cash dividends, he added.
For example, Reckitt Benckiser disbursed 980 per cent cash dividends for 2022, down from 1650 per cent for 2021. British American Tobacco declared 200 per cent cash dividends for 2022, down from 275 per cent for the year before, and Linde Bangladesh paid 420 per cent for 2022, down from 550 per cent for 2021.
GP saw its revenue grow 5.52 per cent year-on-year to Tk 158.70 billion in 2023.
The overall revenue rose mainly due to a higher revenue from voice only and data only services.
"With a continued focus on expanding our network and spectrum rollout, we prioritised meeting our customers' needs through digital-centric innovation and services," said Yasir Azman, chief executive officer.
GP's SIM market share is 43.1 per cent. In comparison, Robi and Banglalink have a market share of 30.7 per cent and 22.8 per cent respectively.
GP's subscriber base remained flat at 82 million, compared to the year before, while 56.9 per cent or 46.6 million of GP's total subscribers are using internet services.
In 2023, GP contributed Tk 122 billion to the national exchequer, equivalent to 77 per cent of its total revenue, in the form of taxes, VAT, duties, licenses, and spectrum assignment fees.
Its total assets rose by 15.30 billion to Tk 200.38 billion at the end of 2023, while expenses increased by Tk 5.30 billion in the year due to an increase in depreciation & amortization costs.
Grameenphone, part of the Telenor Group, has built the largest cellular network in the country, covering 99 per cent of the population. It is the largest stock if market cap is considered. The stock has been languishing at the floor price of Tk 286.6 per share since September 22 last year.
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