Multiple businesses delay dividend payments, disappointing investors
Overall, the delay in dividend payments to shareholders by businesses is related to their difficult financial situation and insufficient cash flow.
Multiple businesses have been continuously delaying dividend payments, some even for a decade, leaving shareholders disappointed.
One notable company is Sudico Investment and Industrial Development Corporation (Sudico or SJS). Most recently, the company's Board of Directors approved the extension of dividend payments for the years 2016 and 2017, totalling 20 per cent in cash, from June 30, 2023, to December 31, 2024. This marks the 9th time the company has deferred the payment of dividends for 2016 and the 5th time for 2017.
The given explanations continue to sound familiar, attributing the situation to persistent financial challenges and the company's inability to secure funds. Shareholders of SJS have been eagerly anticipating dividends for almost seven years, but unfortunately, they have yet to materialise.
However, this is not the most extreme case.
Construction firm Sông Đà 3 Corporation (SD3) recently announced the postponement of dividend payments for the year 2015 until December 31, 2024. The dividend rate is 5 per cent, equivalent to approximately VNĐ8 billion. In the initial announcement, SD3 planned to distribute dividends by August 31, 2015, but the timeline has now been extended by an additional nine years and four months.
Similarly, at construction firm Lilama 45.4 Corporation (L44), shareholders have faced a delay of nearly 9.5 years and still have not received dividends for the years 2012 (14 per cent) and 2013 (3 per cent), totalling approximately VNĐ7 billion. The company has changed the dividend payment timeline nine times. The main reasons were the company's suspension of production and business activities for corporate restructuring and significant financial difficulties, including outstanding salary payments and large amounts owed in taxes and insurance. Consequently, the company has been unable to arrange funding for dividend payments.
Construction enterprise Licogi Quảng Ngãi (LQN) recently announced a further delay of dividend payments for an additional 2 years, from September 29, 2023, to September 30, 2025. The company has changed the dividend payment timeline over a dozen times, resulting in a total delay of more than eight years since the initial dividend announcement.
In the latest document, LQN stated that they had tried to work with partners to secure funds. However, due to prolonged difficulties, the expected receivables from partners did not materialise as anticipated, requiring more time to balance the cash flow.
Several other companies have also been relatively slow in paying dividends to shareholders, such as Cầu 12 Joint Stock Company (almost seven years), Licogi 9 (over four years), and Thuận An Coffee (five months). There is even a unique case of dividend cancellation recorded at Bình Định Food Corporation (Bidifood or BLT).
Initially, BLT planned to distribute dividends for the year 2022 at a rate of 170.5 per cent, equivalent to VNĐ17,050 for each share owned by shareholders, with a total expenditure of over VNĐ68 billion. BLT made a payment to shareholders at a rate of 30 per cent in cash, corresponding to VNĐ12 billion in June 2023. However, they subsequently halted the payment of the remaining dividends, which amounted to 140.5 per cent, leaving shareholders disappointed.
BLT stated that the company's financial situation was very difficult, with no capital available to pay the remaining dividends. The reason was the significant increase in the cost of goods, with rice prices rising by over 50 per cent since July, averaging above VNĐ15,500 per kilogramme. BLT had to maintain a reserve of over 3,000 tonnes of rice worth VNĐ46 billion, leading to capital constraints, reduced capital utilisation efficiency and increased interest expenses.
Overall, the delay in dividend payments to shareholders by businesses is related to their difficult financial situation and insufficient cash flow. For example, SD3, despite a net profit of nearly VNĐ8 billion in 2023, still accumulates losses of nearly VNĐ231 billion.
L44 also accumulated losses of nearly VNĐ196 billion by the end of 2022, and its shares are restricted from trading due to late submission of the audited financial statements for 2022 and negative owner's equity in the audited financial statements for 2021.
At Licogi Quảng Ngãi, in addition to the delayed dividend payments, the company also owes salaries and insurance to employees for a prolonged period. Since being listed on UPCoM, Licogi Quảng Ngãi has incurred losses for three consecutive years from 2020 to 2022. As of December 31, 2022, the accumulated loss of Licogi Quảng Ngãi exceeded VNĐ29 billion, resulting in negative contributed capital of over VNĐ7 billion. — VNS
