BSEC summons Robi for not paying dividend from profit
The Bangladesh Securities and Exchange Commission yesterday summoned the officials of Robi Axiata to find out reasons why the mobile operator did not declare any dividend despite making a hefty profit last year.
The telecom operator's profit after tax rose nine times year-on-year to Tk 155 crore and its revenue also grew 1.1 per cent to Tk 7,564 crore as of December 31 last year.
Robi also made a flying trade debut in the stock exchanges as its initial public offering was oversubscribed by nearly six times.
But the company now believes that it should use the money it had made last year for its future growth instead of sharing it with the shareholders.
"Our earnings per share [EPS] has increased by more than eight times, rising from 4 paisa in 2019 to 33 paisa in 2020," said Shahed Alam, chief corporate and regulatory officer of Robi.
He spoke at the meeting when a team of officials of the mobile operator went to the BSEC building yesterday.
"Had the 2 per cent minimum turnover tax been removed, our EPS could easily have been 64 paisa."
Moreover, due to the minimum tax, Robi could not even avail 5 per cent reduction in corporate tax rate offered to the listed mobile phone operators, he said.
As a result, Robi was subjected to an effective tax rate of 71.8 per cent for 2020.
"In this backdrop, considering the positive growth trajectory of the company, the Robi Board has recommended not to give any dividend for 2020 to secure the investment funds necessary to stimulate Robi's future growth."
"We thought the company would announce at least some dividends. Because, investors love dividend," said a top official of the BSEC, preferring anonymity,
"The company's board has the right for not sharing the profit if it has potential. However, we urged them to think differently next time."
Having added 19 lakh subscribers to its network in 2020, Robi's subscriber base reached 5.09 crore by the end of 2020.
Robi contributed Tk 4,236 crore to the government exchequer in 2020.
"When the competitors saw revenue decline, Robi experienced positive revenue growth," said Mahtab Uddin Ahmed, managing director and CEO of Robi.
The company could have made higher profit, but the pandemic and the 2 per cent minimum tax on gross revenue barred the company from reaching its full potential, he said.
Amid the adversities, the company also renewed its 11.6 MHz spectrum licence for 900 and 1,800 bands for 10 years to stay true to its commitments, he said.
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