BBS approves the lowest dividend since listing

Bangladesh Building Systems (BBS) — a leading manufacturer of pre-engineered steel buildings — has approved the lowest dividend in its nine years of listing on the stock market.

The company approved a 2% cash dividend for its shareholders for the fiscal year that ended on 30 June 2021.

Due to the pandemic blow, its business slumped because of the challenges in the construction industry and the company incurred a loss, amounting to Tk3.61 crore in FY21, for the first time since listing.

Despite the loss, BBS will pay the dividend from its retained earnings. As of June 2021, the company's retained earnings stood at Tk69.34 crore.

The shareholders approved this dividend in an annual general meeting (AGM) that was held on Monday.

Meanwhile, the Dhaka Stock Exchange (DSE) has downgraded the company from 'A' to 'B' category on Monday because it failed to meet the minimum threshold of 10% dividend payout that is required to stay under the 'A' category on the main bourse. The decision will be effective from today.

The DSE requested the stockbrokers and merchant bankers to abstain from providing loan facilities to purchase securities of the company between the 1st and 30th trading day after the category change.

Earlier in its years of listing, the company had paid a 15% stock dividend for the shareholders. After that, it paid 10 to 20% dividends till FY19. 

In FY20, the company paid 5% cash and 5% stock dividends.

According to its latest annual report, the company's revenue and profit have been declining for the last five years.

In FY17, its revenue was Tk248.9 crore, which was 5% higher than the previous fiscal year. During that fiscal, its net profit stood at Tk34 crore.

But in the last 2020-21 fiscal, its revenue declined to below Tk100 crores. Its net profit after tax declined continuously with revenue over the years and finally, in FY21, it ended up in losses. 

BBS was incorporated in 2003 and got listed on the bourses in 2013. 

Usually, pre-engineered steel buildings are preferred for factories, warehouses, hall rooms, workshops, aircraft hangers, office buildings, commercial showrooms, distribution centres, supermarkets, restaurants, and also residential buildings.

Engr Md Abu Noman Howlader, chairperson of BBS said in the company's annual report, "We have generated lower revenue, and operating profit due to some challenges in the domestic industrial sector in general, and the construction industry in particular with a difficult economic atmosphere."

The company is trying to recover its financial strength by overcoming the Covid-19 pandemic situation in the upcoming years, he added.