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TOL Gases announces first dividend in 20 years

TOL Gases has recommended the first dividend of 17/40 per share two decades since listed on Dar es Salaam Stock Exchange (DSE).

The directors of industrial and medical gases supplier proposed a dividend sum of 1.0bn/- for 2018 years after operating under loss.

Tanzania Securities Limited (TSL) said in financial results analysis for TOL that this will be the first dividend to be paid since the company was listed on the DSE in 1998.

“Regardless of the magnitude of the dividend, it marks a turning point in the company’s operations, after wiping out large amounts of accumulated losses,” the statement issued yesterday said.

TSL, one of the largest stock brokerage firms, said they anticipating increased activity as many investors will likely be interested to buy the shares after dividend announcement, despite the current lull in market activity in general.

“Over the past few years, the company has done more than just recover its local and regional market share of carbon dioxide … but it has developed new ones too such as the DR Congo,” TLS statement said quoting TOL directors’ note.

TLS said such statement from the directors and the supportive policies for industrialisation in the country “will likely act as spice for the company to set more growth strategies and investments to cater for the increasing demand for gases.”

Last year TOL Gases posted net profit increase of 23 per cent to 2.6bn/- from 2.1bn/- recorded in the previous year.

Revenues recorded an upward movement of 23 per cent to 18bn/- from 15bn/-, which saw gross profit increase to 8.0bn/- from 6.8bn/- recorded in the corresponding period in 2017.

The company’s expenses dropped by 9.0 per cent to 3.6bn/- while operating profit rose by 55 per cent to 4.7bn/-. The firm total assets increased slightly from 31bn/- in 2017 to 32bn/-.

The earnings per share (EPS) increased by 20 per cent to 45/46 from 37/71 in 2017. Despite all this, TLS analysis said, net profit took a hit from a substantial increase in tax expense to 1.0bn/- in 2018 from tax credit of 1.6m/- in 2017.

“It is notable that the company was able to reduce its operating expenses by 370m/- in 2018, which could imply that cost management measures were taken and hence higher chances for further improvement in the bottom line,” TLS said in the statement.

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