Multinationals loosen the purse strings

Multinational corporations, whose financial year ended on December 31, 2002, have paid higher dividends for the year compared with previous years.

The higher dividend payout is seen as a relief for shareholders as stock prices of most MNCs slipped significantly in the last one year.

Twenty-seven MNCs have proposed to pay dividends for 2002. The dividend payout will account for Rs 1,645 crore (Rs 16.45 billion) out of their aggregate profits of Rs 2,273 crore (Rs 22.73 billion). In the previous calendar year, these MNCs had paid out Rs 1,444 crore (Rs 14.44 billion) out of the aggregate net profit of Rs 2,185 crore (Rs 21.85 billion).

The dividend payout, however, declined from 66.1 per cent of net profits in 2001 to 60.4 per cent of net profits in calendar 2002.

Of the 27 companies, 19 stepped up dividends between 2.50 per cent and 141 per cent, while two MNCs proposed to prune the dividend rate.

The remaining six proposed to maintain the dividend at the previous year's level. Hindustan Lever Ltd remained the highest dividend paying company with a dividend of 550 per cent (Rs 5.50 per share of Re 1 each) compared with 500 per cent last year.

Foseco (India) has proposed a 150 per cent dividend for the year ended December 2002, which is 141 per cent higher than 2001's dividend of 9 per cent.

Foseco (Jersey) Ltd, the promoters of the company, proposed an ordinary dividend of 100 per cent and a special dividend of 50 per cent arising from the exceptional income on the sale of its steel business.

Foseco posted a net profit of Rs 10.66 crore (Rs 106 million) for 2002 compared with a net loss of Rs 3.41 crore (Rs 34 million) in 2001.

Nestle increased its dividend 40 per cent in 2002 to 180 per cent by distributing nearly 84 per cent of its net profit earned latest year.

Burroughs Welcome celebrated a 100 per cent growth in its net profit by proposing a dividend of 110 per cent in 2002 compared with a 75 per cent dividend in the previous year.

Abbott India increased its dividend payout 20 per cent to 120 per cent. Alfa Laval proposed a dividend of 190 per cent compared with 185 per cent in the previous year.

GlaxoSmithkline Pharmaceuticals increased the dividend for 2002 to 70 per cent from 55 per cent for the previous year.

The other notable multinational corporations that have stepped up dividends include Grindwell Norton, Motor Industries, Siemens, ABB, Albright Wilson and SKF Bearing.