Robi made 725% EPS gain. But it is not giving dividend to investors for 2020

Mobile phone operator Robi Axiata has decided not to give the investors dividend despite a 725 percent rise in earnings per share or EPS.

The newly listed telecom firm, the second largest in Bangladesh in terms of subscriber base, published a summary of its audited financial statements approved by its board of directors for the year 2020 on its website on Monday.

The summary says the board in a meeting earlier in the day did not recommend dividends.

The company is scheduled to hold its 25th Annual General Meeting on Mar 21 virtually, when the statements will get final approval.

Generally, decisions taken by the board do not change in AGM.

Robi’s EPS was Tk 0.33 in 2020, up from Tk 0.04 in 2019.

On Dhaka Stock Exchange, Robi’s price-to-earnings or P/E ratio stood at 139.39.

The ratio is much higher than 14.67 of Grameenphone, the largest mobile telecom operator of the country in terms of subscriber base.

Market analysts consider a share as a “good one” if the P/E ratio is between 15 and 20. The companies with a promising future can have higher P/E ratios.

After hitting the market by the end of last year, Robi is trading under the ‘N’ category.

In the first 15 days of trading, Robi share price increased by 601 percent to Tk 70.1 from Tk 10 before dropping.

On Monday, over 10.4 million Robi shares were traded at Tk 46 per issue, up by Tk 4 from Sunday.

Last year, Robi’s net asset value or NAV per share rose to Tk 13.9 in 2020 from Tk 12.64 the previous year.

Its net operating cash flow per share or NOCFPS dropped to Tk 5.36 in 2020 from Tk 6.1 in 2019.

The SEC in September last year gave regulatory approval to Robi to raise Tk 5.2 billion from the capital market through the IPO to expand its network.

Robi offloaded about 524 million shares or 10 percent stakes of the company, priced at Tk 10 each. The company plans to expand its network with Tk 5.15 billion from the IPO. The remaining will be spent on IPO expenditures.