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Construction suppliers to pay big dividends; experts wary
Construction materials producer Viglacera’s subsidiaries have announced high cash dividends after a healthy first-half but experts are concerned the high rates mean the firms can’t find profitable investments.
Shareholders of Hanoi-listed Viglacera Dong Trieu Joint Stock Co. (DTC) are upbeat following the company’s announcement of its 70 percent cash dividend rate, or VND7,000 each holding. The stock will go ex-dividend on August 6.
Share prices for the building materials supplier Thursday moved up for the fourth straight day to VND76,900.
Viglacera Dong Trieu Director Doan Van Sinh said the firm made more than VND9 billion in the first-haft pretax profit, compared with its registered capital of VND10 billion.
First-half net profit rose 77.4 percent year-on-year to VND8.2 billion, or VND8,225 a share.
The good earnings result was due to government loan subsidies, which enabled the company to cut expenses, Sinh said.
The government has offered a 4 percent interest-rate loan subsidies for domestic enterprises since February in a bid to help them weather the global financial recession.
Viglacera Tu Son Ceramic Joint Stock Co. (VTS), another affiliate of state-owned construction material maker Viglacera Corp., also planed to pay high cash dividents of 40 percent following healthy profits in the first half.
The firm’s after-tax profit in the first six months of the year rose 76.49 percent to VND9 billion, or VND7,265 per share.
Other Viglacera subsidiaries like Viglacera Ba Hien (BHV) and Viglacera Ha Long I (HLY) also announced high cash dividend rates of 35 percent and 25 percent respectively.
“High dividend rates will help build up shareholder confidence and prove that enterprises are sitting on a pile of cash and growing sharply,”
Nguyen Hai Son, at deputy at the FPT Securities Co of brokerage department, told Thanh Nien Daily.
However, economist Le Dat Chi from the Ho Chi Minh City University of Economics, warned that high dividend rates may come from the fact that the companies haven’t been able to find any profitable investments.
“Investors are surely upbeat with high cash dividend rates. But they should be cautious. Growing enterprises are always in need of capital, so they tend to keep as much cash as possible,” Chi said.
Hoang Uy
thanhnien, Dau Tu Chung Khoan
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