Dutch companies quoted on the Amsterdam Stock Exchange paid out more than 7.5 billion euros in dividends over the first six months of this year, i.e. 1 billion euros down from the same period in 2012. Companies have repurchased own shares worth over 3 billion euros, nearly twice as much as in the same period last year.
Amount paid in dividends down for the first time in four years
After four years of continually rising dividend payments, the return to shareholders was lower in the first half of 2013, probably caused by declining corporate profits in 2012. Prior to the global economic recession, a total amount of more than 11 billion euros was paid out in dividends over the first six months of 2008.
Annual amounts paid out in dividends over the period 2008-2013
More optional dividend
In recent years, optional dividend has become more and more popular. Optional dividend gives the individual shareholder the possibility to opt for payment in cash, in shares or a combination of the two. Optional dividend allows companies to keep higher cash reserves and allows shareholders to invest the dividend they receive directly in the company. In the first half of 2013, half of shareholders opted for dividend in shares. As a result, 2.5 billion euros remained in the company coffers, which would otherwise have had to be paid out in cash.
Substantial growth acquisition of shares
Quoted companies had repurchased own shares worth more than 3 billion euros over the first half of this year. Despite this substantial increase, the level is much lower than prior to the economic crisis. In 2008, companies repurchased own shares worth 15 billion euros. Share repurchases avoid the accumulation of excessive amounts of cash in the company.
A second reason for share repurchases is that when there are fewer outstanding shares, the profit per share is higher. This will have a positive effect on the exchange rate-profit relationship.
Acquisition of shares
Jos van Heiningen