Despite the almost apocalyptic results to a few counters, top firms continue to deliver dividends

By RAHIMI YUNUS / Pic By MUHD AMIN NAHARUL

2018 was a bruising year for the larger equity market. Corporate earnings, especially for the final quarter of the year (4Q18), had fallen short of expectations.

Many companies in the telecommunications, plantation, property and transport sectors are counting the cost of large impairments and thinning revenues.

Global geopolitical risks and the slowing economy continue to be drawbacks to the approximately 1,000 listed firms..

The US-China trade war, oil price volatility and Brexit have persistently rattled share prices, forcing the movement of capital and valuation of stocks.

Despite the almost apocalyptic results to a few counters, top companies continue to deliver dividends, the yield that matters to many shareholders — especially fund managers.

The Malaysian Reserve looked at the top dividend-paying companies on the exchange based on dividend per share for the financial year ended Dec 31, 2018 (FY18), based on Bloomberg data and announcements to the stock exchange.

1. Nestlé

Top on the list of the highest dividend-paying counters is Nestlé (M) Bhd. The local operation of the world’s largest food company gave its shareholders RM2.80 in dividends for 2018.

The company posted a 2.54% or RM658.9 million higher net profit last year.

The group’s turnover was up by 4.9% to RM5.52 billion from RM5.26 billion registered in the previous year.

Nestlé shareholders have always rest assured of good dividends and the giant global fast-moving consumer goods company delivering on its promises.

2. BAT

British American Tobacco (M) Bhd (BAT) delivered RM1.55 as dividends. The cigarette maker had shown resilience last year despite facing business challenges and declining revenues.

Its net profit in FY18 dropped by 4.9% to RM468.5 million, while top line shrank by 3.2% to RM2.82 billion.

BAT continues to face headwinds from higher illicit activities, greater regulatory risks, higher competition from similar products and price increase following the reintroduction of the Sales and Services Tax (SST). But on dividends, it is not shy to share the profits.

3. Carlsberg

Carlsberg Brewery Malaysia Bhd had announced total dividends of RM1. Despite claims of the slowing economy, the beer maker’s net profit jumped by 25.3% to RM277.2 million, while revenue strengthened by 14.6% to RM1.98 billion.

Its profit from Malaysian operations rose by 17.4% to RM254.1 million, while Carlsberg Singapore Pte Ltd delivered a higher profit from operations partly due to one-off negative trade offer adjustments of RM17.2 million in FY17.

4. Heineken

Heineken Malaysia Bhd made the list among the top dividend-paying counters with a dividend of 94 sen.

Its net profit rose by 4.6% to RM282.5 million in FY18, mainly attributed to an increase in sales volume, price adjustment on April 15, 2018, and the implementation of SST.

Group revenue rose by 8.3% to RM2.03 billion compared to the same period in 2017, driven by a strong 4Q which registered a higher revenue and improved cost efficiency.

5. PetGas

Petronas Gas Bhd (PetGas), subsidiary of Petroliam Nasional Bhd (Petronas), had declared total dividends of 72 sen as the company posted a record revenue last year of RM5.5 billion, up 12.3% or RM601.4 million more compared to the previous year.

The higher revenue was fuelled by the successful full-year operations of its liquefied natural gas regasification terminal in Pengerang, Johor.

Top line was further boosted by higher contribution from the utility segment. Profit for the year improved by 5% or RM91.3 million on the back of higher revenue — offset by share of losses from Kimanis Power Sdn Bhd following de-recognition of deferred tax assets, as well as higher finance costs.

The group’s gas processing segment is expected to deliver improved earnings on a higher fixed remuneration charge under the second term of the 20-year gas processing agreement effective from 2019 until 2023.

6. PetDag

Petronas Dagangan Bhd (PetDag), another subsidiary of the national energy company, had a reverse fortune, but still delivered 70 sen in dividends.

Its net profit for FY18 fell 44.81% to RM849.85 million despite revenue rising by 9.66% to RM30.07 billion.

The drop in crude oil and petroleum products in the 4Q had affected its overall profitability. Moving forward, PetDag is cautious of the continued volatility of oil prices and the introduction of weekly fuel prices.

But for main shareholders like Petronas and fund managers, 70 sen is a commendable payment in a difficult year for the equity market.

7. Public Bank

Public Bank Bhd founder Tan Sri Dr Teh Hong Piow, who is valued at US$6.7 billion (RM27.4 billion) must be happy with the performance of the bank he established.

The bank has been consistent in keeping to the promise of its founder. Public Bank had announced 69 sen as the dividend for 2018.

Net profit rose by 2.2% to RM5.59 billion in 2018, higher from RM5.47 billion a year ago, extending a nine-year streak of earnings growth — a remarkable performance by any standard.

The country’s second-largest banking group based on market capitalisation enjoyed higher net interest income, fee and commission, and lower provisions.

Since it was listed in 1967, Teh and Public Bank had kept their promise of sharing the rewards from the bubbling lending business.

8. LPI Capital

LPI Capital Bhd, the insurance arm of Public Bank, had announced 68 sen in dividends for 2018.

Profit inched slightly higher from RM313.79 million in FY17 to RM314.05 million in FY18.Revenue grew 2.7% to RM1.51 billion from RM1.47 billion last year, despite the highly competitive market conditions and slower demand for insurance.

The company is expecting the industry — particularly fire and motor classes — to continue to face intense competition following the implementation of the Liberalisation Framework. LPI has not been disappointing.

9. Maybank

Malayan Banking Bhd (Maybank), the largest listed company on Bursa Malaysia, delivered a 57 sen dividend payout with its largest shareholder Permodalan Nasional Bhd which holds a 45.55% interest in the company.

It posted a stunning year. Net profit climbed 7.8% to RM8.11 billion from RM7.52 billion in 2017 on higher net interest income, Islamic banking income and net earned insurance premiums. Revenue rose by 3.8% to RM47.32 billion from RM45.58 billion registered the year earlier.

South-East Asia’s fourth-largest lender said it will maintain its balance sheet expansion in line with forecast economic growth of its three home markets — Malaysia, Indonesia and Singapore — against the backdrop of moderating global growth and uncertainty over trade tensions.

10. AirAsia

Flamboyant aviation tycoon Tan Sri Dr Tony Fernandes, who has a substantial stake in the budget carrier he moulded, must be a very rich and happy man.

AirAsia Group Bhd had delivered a dividend of 52 sen. The company posted a net profit of RM1.98 billion in FY18, a 21.5% jump from RM1.63 billion registered in the preceding year on passenger growth.

Revenue also rose to RM10.6 billion from RM9.7 billion previously. Its share price had increased more than double compared to a few years ago. It is a good year for those
in red.