Companies pay higher amount in dividends despite economic crisis

In the first six months of 2010, Dutch companies quoted on the Amsterdam Stock Exchange have paid more than 7 billion euro in dividends to their shareholders, an increase by 300 million euro relative to 2009. Nearly one quarter was paid as optional dividend.

More dividend in first half of 2010

In the first half of 2010, dividend payments were nearly 5 percent up on the same period last year. Yet, the total amount paid in dividends is still substantially lower than prior to the financial crisis.

Non-financial companies paid out more in dividends in the first half of this year than in the first half of last year. Due to the economic crisis and the ensuing weak state of the balance sheets of most financial companies, they did not pay dividends. Dividend payments over the first half of 2010 amounted to 112 million euro, as against 160 million euro in 2009. This is peanuts compared to 2008, prior to the financial crisis, when the financial sector paid nearly 4 billion euro in dividends.

Dividend payments made by quoted companies

More optional dividend

In the first six months, nearly one quarter of dividend payments (nearly 1.7 billion euro) was paid as optional dividend. In 2008 and 2009, optional dividend accounted for only 10 and 12 percent respectively of the total amount paid in dividends. The economic downturn made it more difficult for the private sector to generate new financial resources for investments and takeovers. Optional dividend is payable either in cash or shares. By leaving the choice to the individual shareholder, quoted companies hope to keep control over at least part of the total amount allocated for dividend payout.

Jos van Heiningen