HA NOI (VNS) — Many firms have announced delay in dividend payout as their businesses are struggling.
Sai Gon Machinery Spare Parts Jsc, listed on HCM City Stock Exchange as SMA, delayed in paying dividends of 2011 to shareholders eight times.
The company attributed money shortage for dividend payout to the rising cost in the construction of Dak Glun hydroelectric plant, coupled with the prolonged economic recession resulting in tightened credits.
SMA targeted to pay the dividends of three years — 2011, 2012 and 2013 — within this year. Still, the company was making effort in restructuring to be able to arrange money for dividend payout.
It was estimated that with 16 million shares listed, the company required VND19 billion (US$904,000) to pay off dividends to investors (at a payout ratio of 12 per cent). Meanwhile, on its balance sheet as of March 31, the company had only VND14.6 billion ($695,000) in cash and cash equivalents and undistributed profit was modest at about VND8 billion ($380,000).
Song Da 9.06 (S96) has recently delayed to pay 2010 dividends, worth VND22 billion ($1.04 million), to the end of 2014. This was the sixth time within the last three years that dividend payout has been delayed.
To make matters worse, the company was delisted from Ha Noi Exchange in May 30, with a negative profit of more than VND50 billion ($2.38 million) and only VND140 million ($6,600) in cash.
Song Da 7 (SD7) also delayed dividend payout, worth nearly VND15 billion ($714,000) at a payout ratio of 16 per cent, of the year 2010 to the next year because the capital withdrawal and debt collection failed to meet its plan.
Previously, An Binh Bank had planned to pay around VND120 billion ($5.7 million) dividends to investors on May 30 but it was postponed. The bank stated that payout will be conducted as soon as the bank receives the approval of the State Bank of Viet Nam.
As rights of small shareholders were infringed with delayed dividend payout, the capital market group of the Viet Nam Business Forum proposed that updates of dividend policies and payouts must be announced on the enterprises' websites for investors to follow. — VNS