MJL Bangladesh's profit declines for rising costs amid devaluation of taka

MJL Bangladesh has recommended 50 per cent cash dividend for fiscal 2021-22 despite a decline in profits, only to maintain consistency with its previous records.

Profits fell because of the rising costs of business in tandem with the devaluation of taka against dollar.

The company, a major player in the country's lubricant business, provided 55 per cent cash dividend in the previous fiscal year.

"We maintain a consistency in dividend distribution up to 55 per cent. We also keep aside a big chunk of the profit as retained earnings so that we can continue to give dividends in future," said Azam J Chowdhury, managing director of the MJL Bangladesh.

The company has set aside more than Tk 2.0 billion from profits in fiscal 2021-22 as retained earnings to face economic challenges next year amid high energy costs across the globe.

While recommending dividend, the company's board of directors approved of the purchase of a newly-built AFRAMAX oil Tanker for $75.00 million.

"We will purchase a new tanker taking into account its environment-friendly services and operational cost efficiency," Mr Chowdhury said.

There are troubles in operating a large tanker, he said. "Nevertheless, we will be able to see a rise in profit as the freight charge will increase significantly due to the global energy crisis."

Previously, the MJL Bangladesh approved of 10-12-years-old AFRAMAX tanker at a cost of $30.72 million.

The official said the company's consolidated operating cash flow declined marginally due to a rise in operating expenses.

The MJL Bangladesh has reported a consolidated net operating cash flow per share of Tk 5.28 for fiscal 2021-22, reduced from Tk 8.24 in the previous fiscal year.

Presently an 'A' category company, it was listed with the stock exchanges in 2011.

The company's sponsor-directors hold 71.52 per cent shares, institutes 21.49 per cent, foreigners 0.15 per cent and individual shareholders 6.84 per cent as of September 30, 2022.

The share price closed at Tk 87 on Tuesday after a rise of 0.35 per cent or Tk 0.3 on the Dhaka Stock Exchange.

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