19th December 2024, kathmandu
Three companies listed on the Nepal Stock Exchange (NEPSE) have recently declared they will not distribute dividends for the fiscal year 2023/24.
NEPSE Companies Skip Dividend Payout
The companies making this announcement are Corporate Development Bank (CORBL), Ganapati Microfinance Bittiya Sanstha Ltd (GMFBS), and Vijay Laghubitta Bittiya Sanstha Limited (VLBS).
Decisions Made During Board Meetings
The decisions were made during board meetings held on December 18 and December 19. Corporate Development Bank and Ganapati Microfinance Financial Institution held their meetings on December 18, while Vijay Microfinance Financial Institution held its meeting on December 19.
After thoroughly reviewing the financial results for the last fiscal year, the boards of these institutions concluded that, due to their current financial standing and strategic priorities, they would not allocate any dividends to their shareholders for the period.
Financial Reports Sent to Nepal Rastra Bank
Following their decisions, these three institutions have submitted their financial statements to Nepal Rastra Bank for approval. The reports will undergo further scrutiny before final approval is granted.
The companies explained that several factors, including their financial performance, operational challenges, and evolving business priorities, influenced their decision to withhold dividend payouts for the period.
Impact on Shareholders
The announcement of no dividend distribution has likely come as a disappointment to shareholders who were expecting returns on their investments. Investors will need to wait for the next fiscal year to see whether these companies will choose to issue dividends based on future profitability.
Companies Long-Term Strategy
The decision reflects these companies’ long-term business strategies. Rather than paying dividends, they may be focusing on reinvesting profits to strengthen their financial position or expand operations.
This decision shows the institutions’ focus on long-term growth over short-term shareholder returns. Withholding dividends will strengthen their financial position and ensure future stability.
For more: NEPSE Companies Skip Dividend Payout