Higher dividends follow firms' return to health

Uma Shankari


Mon, Aug 30, 2010

The Business Times

(SINGAPORE) There were few surprises from companies that reported full-year results in the recent reporting season. Most turned in better earnings or lower losses, in line with the global economic recovery.

And to reward shareholders, many said that they would pay out higher dividends than for 2009, citing improved operating profits and net cash positions.

Data compiled by BT showed that as at 5pm last Friday, 73 companies had reported their financial results for the year ended June 30, 2010. And of these firms, 59 reported profits while the remaining 14 recorded losses.

Most companies (some 74 per cent) performed better this year, either turning in higher profits (36 companies) or lower losses (nine) or is back in the black (nine).

Companies, which generally attributed their better year-on-year showings to the better operating environment, also sought to thank investors for sticking by them through the recent lean times.

Of the 45 companies that turned in either higher profits or moved from losses to profits, close to 70 per cent will pay out higher dividends for FY 2010 compared to the previous year. The six companies with the largest net profits for the financial year ended June 30 - Olam International, Singapore Exchange (SGX), Wing Tai Holdings, GuocoLand, Hsu Fu Chi International and Sim Lian Group - all proposed higher dividends for 2010.

Olam reported exceptionally strong fourth-quarter results, which led to full-year results which were well ahead of expectations. The company will pay a total dividend of 4.5 cents a share this year, up from 3.5 cents in 2009.

Wing Tai will also pay out one cent more - it has proposed a dividend of five cents a share for 2010, up from four cents in 2009.

SGX, which said that the recently ended financial year was its second best since the company listed in November 2000, proposed a final dividend of 15.75 cents per share, bringing the total dividend for FY 2010 to 27 cents per share. In addition, the company's board also increased SGX's base dividend commitment to 16 cents per share effective from FY 2011, payable on a quarterly basis.

Sim Lian Group threw in another treat together with higher dividends; the property firm also proposed a bonus issue to increase its capital base to reflect its growth and business expansion and to give 'due recognition' to shareholders for their continued support. It proposed a dividend of 3.7 cents a share, up from 1.4 cents a year ago.

But perhaps the most sincere gesture came from probe card distribution and services solutions provider Ellipsiz. The firm posted a net loss in 2009 after its factory and office property at Joo Koon Crescent was hit by a fire. Now, it is proposing a special cash dividend of 1.1 cents a share from its one-time income - which was boosted by insurance claim income of $22.3 million - to thank shareholders. This will be paid out on top of a final cash dividend of 0.15 cents.

'We would like to thank our shareholders for your patience and support during the difficult period. Your vote of confidence is important, and we look forward to your continued support,' said Ellipsiz chief executive Melvin Chan.

Last year, Mr Chan said that 2009 was a 'a very difficult year' for the group and no dividends were declared.