Market Report

ACLEDA to Pay Record Highest Dividend in May

The dividend pay-out makes up 40 percent of its net profit for the financial year 2022, with plans to sustain this momentum in coming years
ACLEDA Bank on Monivong Boulevard, Phnom Penh, November 15, 2022. Kiripost/Siv Channa
ACLEDA Bank on Monivong Boulevard, Phnom Penh, November 15, 2022. Kiripost/Siv Channa

ACLEDA Bank PLC shareholders have approved a dividend pay-out of nearly 689 riel per share (17 cents) for the financial year ended December 31, 2022 (FY22), totalling 297.1 trillion riel ($72.3 million), which represents 40 percent of its FY22 net profit.

The dividend to be paid on May 19, is its highest since the commercial bank went public in 2020, the bank’s filing with Cambodia Securities Exchange (CSX) showed, noting that the record date is May 10.

Accordingly, the latest pay-out is an increase from 35 percent in FY21 and 30 percent in FY20.

In the fiscal year 2022, ACLEDA reported the largest gains ever in net profit, rising 9.08 percent to $181.8 million compared to $166.7 million in FY21.

Net interest income stood at $445 million as opposed to $401.4 million last year while revenue climbed 17.4 percent to 3.04 trillion riel ($739.8 million).

It is understood that the dividend is among the highest among listed companies on the Cambodian bourse.

It is quite common for listed companies to be conservative in the beginning, adopting a “low dividend payout” at the start, said CSX CEO Hong Sok Hour.

However, he added, as the issuers get more comfortable with the market, they progressively increase the payout.

“I believe they know what they are doing. Since the beginning, they promised to increase the dividend payout rate progressively. The target is to reach 50 percent (of their net profit) within a few years, I believe.

“This is good for the market at the beginning stage like ours, as we need to provide enough incentives to investors,” Sok Hour said.

Last December, Mar Amara, executive vice president and chief financial officer, told Kiripost that the bank continues to grow sustainably and has a “good policy” related to dividend distribution and growth every year.

She mentioned then that the bank might beat its previous dividend pay-outs given the extra gains in net profit.

Could ACLEDA sustain this momentum? She said yes. “The management and board of directors strongly believe that the retained earnings of 60 percent and other sources of funds, particularly deposit mobilisation, would be strong enough to support the bank’s sustainable growth going forward.”

This year, two initial public offerings (IPOs) have been planned by Mengly J Quach Education Plc (MJQE), which hopes to raise $10 million to expand nationwide, and Royal Group’s CamGSM Plc, owner of telco major Cellcard, on CSX.

“Of course I am excited to see what the results of the new IPOs would be. I expect to see a massive participation from the public,” said Sok Hour.

That being said, the present moment is a “bit challenging” as banks are offering high interest rates, he opined. “But I am confident that our listing applicants can attract enough investors to subscribe to all their shares.”

After ACLEDA, CSX’s largest IPO till 2020 which raised $17.5 million, the new stock launches could provide investors and listed companies opportunities to diversify their source of funds, Amara said.

“CSX would become a confident capital market for investors and issuers. Investors would have more choices to invest in listed companies while listed companies would do their best to improve their business operations to satisfy investors,” she added.

Year-to-date, ACLEDA share price has risen five percent, while earnings per share as of December 31, 2022 expanded 28.3 percent to 1,715 riel from 1,337 riel enabling investors to capitalise on the growth.

The stock closed 0.2 percent higher at 11,400 riel with 158,895 shares traded for a full market capitalisation of 4.9 trillion riel ($1.2 billion).